Financial considerations when two become one

Royalists are looking forward to the wedding of Prince Harry and Meghan Markle later this month in what they will no doubt consider to be the wedding of the year. Of course, if you are getting married this year, you might not agree!

While Harry and Meghan probably don’t have much to worry about when it comes to their future finances, both being millionaires in their own right, they would still be wise to have a serious chat about finances in the run up to the wedding. And so should anyone getting married, or even simply moving in with someone.

None of us go into a loving partnership believing that it is going to fail but the fact is that many do, and one of the most common reasons is disagreements over finances. There are many different reasons why couples argue over money – one half of the couple might be more profligate than the other, financial priorities may not tally, earnings will differ and could be a flash point for resentment.

This is why it is key to have some open and honest conversations about finances before two become one. Here are the topics you should tackle before your finances become joint:

Who will pay the bills?

Will these be paid by one partner or split between both of you? And is a 50:50 split fair or should you each pay a share proportional to what you earn? Establishing the rules before you are cohabiting makes things clear for everyone and minimises the potential for conflict. Also decide who will be physically responsible for ensuring that the bills are paid on time.

Banking arrangements

While wedding vows often include the line ‘all I have I share with you’ many couples still like to maintain separate bank accounts with a joint account reserved for joint expenses. I know couples who genuinely do share everything and others who wouldn’t countenance it – you will need to discuss what will work for you and your partner.

Existing debts and loans

The truth will out! Always be open and honest with your partner about any debts or loans that you have so there are no nasty surprises down the line. It is important that any repayments are taken into account when working out monthly expenses.

Work out a budget

It may sound extreme but households should be run like businesses with at least one of you, preferably both, keeping close tabs on what goes in and out each month and tracking exactly how much is spent and on what. Make sure you also set apart a certain sum each month for your…

Long term financial planning

If you’re in the throes of love I’m sure you envisage growing old with your sweetheart. In order for that to be a happy and comfortable time you need to start setting some financial planning goals which should include putting money away for retirement. If you are moving in together or getting married it is a perfect time to see a financial adviser who can help you define your financial goals and work out how you are going to achieve them. You’ll need to think about where best to invest to make that money grow and also how best to protect it with relevant insurance products.

If you are a couple looking for some financial advice, why not arrange to meet with one of our financial planners who can cover these issues and more? Contact us to make an appointment so that you can both get on the same page and ensure an argument-free life together – at least where money is concerned!