Talking to your partner about money is important, even more so if you have different spending and saving styles. Money matters in a relationship and your philosophy towards it may impact your relationship. Having a cohabitation agreement is a good early way to flesh out your partner’s views on money and commitment to the relationship it can also establish your de facto relationship property rights.
Relationships should always be equal, and that means different things to different people. Some people think “equal” means a total 50/50 split in finances, but often that’s not always possible or realistic for a couple. What if both of you don’t make the same amount of money? Why should you feel forced to split things evenly. Knowing exactly what both of you are expected to contribute to a relationship is important to clarify, so no one ends up feeling exploited or out of their depth financially. Binding financial agreements can help you discuss these sensitive matters as the structure of the agreement forces you to discuss what matters most to each of you in terms of the financial makeup of the relationship. It will also identify any de facto relationship entitlements you may agree together.
Knowing how much money your partner makes or has is important. It just is. We are not saying you have to start asking for bank statements on a second date, but if you’ve been together for a while, and plan to stay together, or if you’re planning to move in together, you don’t want to have “Surprise! I’m broke!” suddenly come up. Understanding your de facto relationship entitlements is important. It’s more than fine to support your partner in trying times, and have them do the same for you, but you don’t want to wake up one day to someone simply expecting you to carry them. You want to know that while your partner might not always be in a comfortable financial situation, their ultimate goal is to be able to put money in the bank, not to ride on your coattails. Understanding your partners financial position will also help you gain perspective on any de facto relationship property rights each you might potentially have.
And yes, as mentioned above, there might be times when you need to unexpectedly support the other person in your relationship. Things happen people lose jobs, big bills need to be suddenly paid and in these moments, you’ll learn that your relationship is a financial partnership as much as a romantic and emotional one. You need to understand that when it comes to money, if you’re in a serious relationship, you’re in it together. Their hard times are your hard times now, and vis versa. Having a document such as a binding financial agreement or cohabitation agreement that sets all of this out can be extremely helpful to some couples.
Focusing on finding out whether or not a potential partner is someone who you can trust with money is way easier than trying to have a relationship where one person is constantly monitoring the other’s spending. Having a similar approach to money will help you negotiate any de facto relationship property rights you may have with your partner. You need to make sure that you are both capable of being reasonable, respectful and communicative when it comes to everyday spending, and that you share the same goals when it comes to spending and saving in general. You can have a cohabitation agreement or a binding financial agreement but if you are both not on the same page about money & spending conflict is likely to arise.
Having similar financial priorities really matters in a relationship. Here are four crucial issues that couples should discuss to ensure your relationship & money philosophy’s align. These conversations are often not easy for many have for many reasons.
Here are a list of issues for you to explore with your partner, these are designed to help you structure the conversation around de facto relationship property rights.
- Relationship goals: Work out your relationship goals with your partner. Consider what goals you share. Is marriage, buying a home or having a baby on the horizon?
- Current financial situation: Take stock of your income and expenses, assets and debts and your credit rating. Start thinking about ways you may be able to reduce spending so you can save for your goals, and how you can reduce any debts faster. Talk about your de facto relationship entitlements and understand each others views on how you want to conduct your financial relationship.
- Attitudes to spending and saving: Are you a spender or saver? What about your partner? Your background and experiences will influence how you think about money. Understanding how your partner approaches financial matters will make it easier to create a money plan that suits you both. Try to find common ground so that you are working together. A good place to start is a cohabitation agreement or binding financial agreements. While not easy to discuss & negotiate they will ensure you cover points that matter to both of you.
- The financial controller: Who will handle the finances? Will one person look after household expenses, mortgage and savings, or will you share the responsibility? Make sure you’re both happy with the decision.
Discuss these things with your partner. Be open & honest in your communication style. Remember this list is not exhaustive it is designed to get you talking & open the dialogue about money between the two of you.
Remember, the information contained on the site does not constitute legal advice. If you think you need legal advice you should contact an Accredited Family Law Specialist.
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