Today, a growing number of millennial couples are seeing themselves struggle financially, starting with the fiscal responsibility of the first date or the long-awaited diamond ring.
Statistics from the Pew Research Center survey suggest that only 26% of young adults ages 18-32 are married. On the other hand, 48% of Baby Boomers and 36% of Generation X tied the knot.
Whether for financial or personal reasons or simply dropping marriage in its entirety, millennials in long-term relationships are delaying marriage. According to US money and dating experts, miscommunication is the primary issue couples face in long-term relationships. On the contrary, communication is the most effective remedy to improve interpersonal relationships and even finances.
Here are six easy tips for sharing finances in a long-term marital relationship:
Have Honest Discussion About Your Finances
If you are serious about your relationship, avoid unnecessary delays in discussing your spouse-to-be’s personal finances. It would be best to initiate the discussion to create a sense of trust and safety between you two, typically by highlighting your current financial circumstances and concerns. These conversations can result in plans for sharing finances to maintain your ideal lifestyle and career aspiration and bring a couple closer together.
In fact, regular financial discussions will help both parties understand how money should be spent more effectively. Thus, aim to set aside a scheduled time every week in order to have financial conversations. Although saving and spending patterns may be quite different, communication helps design a budget that suits both individuals’ needs in the relationship.
Create a Joint Account for Entertainment and Vacation
Maintaining a separate account for funding expensive leisure and entertainment activities allows a couple to financially work together for mutual goals, like vacations, shopping, event celebrations, and dining out. Joint savings account for goals like home renovations or buying a family car is a good idea. Individual budgeting a few months early can serve as an alternative to joint accounts and sharing finances.
Stay Away From Cosigning Debts
Although this choice typically depends on how much you trust your partner, experts often disagree with the idea of cosigning debts for couples as you can be forced to pay the bill alone when your partner fails to do so. You might be interested in cosigning a loan as it can result in a lower interest rate, but it can backfire significantly as well. As personal finance management and business bookkeeping should not be intermingled, cosigning personal debts should be avoided when sharing finances.
Consider Convenience and Comfort When Deciding Who Pays the Bill
While it had been a commonly held notion that one partner pays a date-nights bill, splitting a dinner bill is a good way for sharing the financial burden. In either case, experts suggest that couples do what they feel convenient and comfortable with instead of putting unnecessary burdens on one party or the other. However, when you are in a serious relationship with your partner and are both equally comfortable contributing to your relationship’s cost, then such a step makes perfect sense.
For Couples Living Together or Thinking of Making A Move, Consider These Options
Create a legally enforceable contract before making any move together. Couples should avoid hurrying to decide to move in together. Because, in case you do not live together in the future or break up, one of them could be at a financial loss in the absence of a contract proving joint contribution for sharing finance. Thus, a contract in writing is essential and may also include pets, cheap and expensive shared personal possessions and belongings, and who gets the property’s ownership in case you split up. Though you may find it awkward and frustrating, you are simply ensuring each of your financial and residential security.
Take Advantage Of A Joint Account To Pay Your Bills
Couples should consider setting up a joint bank account for sharing finances when they can make regular deposits of a certain percentage from their earnings. These funds will be used to pay bills like utilities and rent or mortgage payments. When deciding to merge most of your income, consider separating accounts for discretionary spending on items like clothes, accessories, and weekend activities.
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