Marriage is a formally recognized union of two people as partners, but we like to say that it is a beautiful journey full of challenges and adventures. Before you decide to say “I do ” and tie a knot forever, it is important to build a solid financial foundation with your partner. Although it is not the most romantic thing in the world, you need to talk about money if you want financial harmony. These conversations will help you avoid potential conflicts and find a balance between your financial styles.
If your partner is an impulsive spender while you are a disciplined saver – don’t worry! These situations are common, and we are here to show you how to prevent future problems with your future spouse. Read our advice and say “I do ” with confidence.
Talk About Money
The very first step to achieving financial harmony is to have open and honest discussions with your partner and understand each other’s financial background, habits and expectations. These conversations might be uncomfortable at first, but it is super important to be transparent about your daily/monthly expenses, debts, saving goals and financial styles generally will reduce conflicts.
Share your monthly income and explain what you typically spend it on. Always be transparent and say if you have any debts such as student loans, credit card balances or car payments. Talk openly about your financial goals and dreams – do you want to travel a lot? Buy a new home? Do you want to have children? These are the discussions you will have with your partner sooner or later. Our advice is to talk about money when times are good because they will lead to a positive outcome more likely.
Always Budget Together
Now, when you have a clear picture of your financial situation, you are ready to create a joint budget. As a couple, you should have the same goals, which means you should manage shared expenses and savings. This doesn’t have to be a daunting task – start with writing down expenses. Calendar, spreadsheets or apps to track your finances can come in handy. Review the numbers from time to time and see if there are any areas that may need addressing. Do you spend too much on dining out? How much do you spend on groceries and utilities? Do you need to save more for your first home, vacations or a retirement fund? Discuss everything in detail.
The key is in understanding your household budget. Remember to give each partner a little room for discretionary spending and financial independence while working together on larger goals.
Build an Emergency Fund through Savings
Establishing an emergency fund might not be your priority, but life is full of surprises and having a safety net can provide a piece of mind. Start small – aim for three to six months’ worth of the life expenses you can predict. These incremental savings will lead to significant progress and stability over time. A Canadian high-interest savings account is a smart choice for growing this fund – it offers both security and competitive returns.
Make Plans for the Future
Marriage is a long-term commitment, so your financial planning should be. Take some time and set your goals for the future: start contributing to retirement accounts early, plan wisely for major expenses (buying a house, starting a family, education…) and set your financial milestones. However, life can become unpredictable and we might need to shift our focus sometimes.
Remember to stick to your financial plans in these situations, just re-evaluate your priorities. Do we really need that car? Maybe we can choose some cheaper destination for our vacation? If your financial situation becomes worse, make necessary adjustments – take a close look at your spending and saving habits. Use your money to support what is most important to your family – just discuss everything with your partner and work through it together.
Bank Accounts Management
There are different ways to manage your bank accounts as a couple. This conversation is important for your future, and you should find the system which works best for you. Separate accounts, joint accounts or combination of both? Opt for what feels comfortable for both of you.
Joint accounts are the easiest way to manage money, because everything comes into and goes out of the same place. Another benefit of this model is that you can manage all your expenses as a team. Drawback of joint accounts is that it can lead to conflicts and discomfort if one of you makes the most of the money.
Separate accounts are good because they provide the feeling of independence – you do not have to explain your spending habits and priorities to anyone. What is more important – you are not responsible for other people’s debts. This method requires a lot of logistical work and you have to decide who is in charge of paying for what, which can lead to conflict.
The third, hybrid method is good because it is easy to share expenses, but you still have the financial independence. The problems can occur in situations where one partner makes much more money, so it is crucial to fund the personal spending account evenly.
Ask Professionals for Advice
If you are not sure how to manage your money as a couple or just need some advice, don’t hesitate to consult a financial planner. Professional help is sometimes necessary for setting and achieving your financial goals. You will get advice suitable for your specific situation and the entire process will be smoother for both you and your partner. Explore resources from trusted financial organizations like CPA Canada to further your financial knowledge as a couple.
