The choice to live together, get married or re-married is a life changing one. And even though it’s easy to be swept up in the excitement of new love and the wonder of feeling we have found the one, there is a number of key questions to ask before joining forces and finances. Because being able to have open, honest discussions about your finances now is a key ingredient to building a great relationship and solid financial foundation into the future.
- Where Are You Financially? – Make time to discuss each partner’s current financial position before jumping into the next stage of your relationship. This means understanding what each brings to the table, including assets, liabilities, income, expenses, savings and ongoing responsibilities. Speak with your mortgage broker regarding structuring joint loans or refinancing existing mortgages if required.
- How Do You Handle Money? – Check out each other’s financial IQ and see where your strengths and weaknesses lie. Is one partner a saver, whilst the other is a spender, does one partner earn a high income whilst the other has built assets or passive income or perhaps one of you is better with budgets and managing money?
- What Are Your Future Goals? – Share your financial goals and expectations for the future and see where you share similar dreams or desire different outcomes. Once you’re clear on these decide upon what you wish to achieve as a team. Set joint goals and agreements on how you will reach these together. Check out our online mortgage calculator to help plan your future property goals.
- What About Children? – Discuss your thoughts around having children or, if you already have them, how you will care and provide for them into the future. It is wise to discuss expectations around when to start a family and how many you would like, who will be mainly responsible for childcare or how you’ll handle a blended family if you already have children.
- What if Someone Leaves? This can be a difficult to imagine, but it’s important to consider what will happen if your relationship ends. Talk about a fair and equitable exit strategy should you break up or divorce. You can put this in writing via a pre-nuptial agreement, especially if you are marrying for the second time.
- How Can We Protect Ourselves? Discuss life and health insurance, income protection, structuring joint property, mortgages, assets and superannuation funds so you have a plan should either of you become ill, incapacitated, unable to earn an income or retire.
- What if Someone Dies? Finally, it is important to share your wishes in the event of your death or your partner’s. This means creating or updating your Wills and considering how assets and finances will be handled for your spouse and children.
Until next time champions… ask the hard questions today to avoid heartache in the future.