There are many stages in a couple’s life. The many firsts are particularly memorable — first date, first kiss, first road trip, first meet-the-parents date. And then there are big moments, ones that require shared dreams and a great deal of commitment. Getting married or deciding to grow your family or moving in together are moments that tell the world these couples are ready to take their relationship to a whole new level.
Moving in together is a big move, to say the least. Just married, just got engaged, or just feeling capable — couples who start to live together need not only be emotionally ready. They need to be more than just to be in love. Moving in together means you have to be ready to share the responsibility and be committed to making things work. This also means managing finances with your spouse or significant other, a very personal and deeply polarizing matter if you let money ruin your partnership.
The first thing that couples normally need to decide on is which condo they’ll rent. Condo renting is the most popular and most practical living arrangement for couples these days because not everybody has enough savings to buy their own. Condo living is also preferred because of its proximity to business districts and because of the flexibility it allows. And that’s where the sensitive subject of finances also starts: Can you afford a condo? How much are you both willing to spend? Who will pay for the dues and utilities? How do you split the bills?
Don’t freak out. There is nothing more beautiful than waking up next to the person you love. Don’t let money matters take that away from you. Here’s how you should deal with it.
No secrets allowed
There was a time when speaking about money was kind of taboo. Guess what? That’s all behind us now. If you trust your partner enough, having full disclosure about finances should not be an issue. Put your credit score out there. Talk about how much one makes. If you are on the same pay grade, it should be easier. But when it is lopsided, talk about how you can both chip in.
By this time, you probably already have an idea about the spending habits of your significant other and you might want to discuss that. If your partner is an impulsive buyer or gets something delivered every week from online shopping, that’s worth a one-on-one. If you are a saver and your partner isn’t, you might want to open up how you think having an emergency fund is really helpful. In short, just be ready to discuss finances and keep an open mind.
Split, divide, and conquer
Once you move in together, you are one unit. There’s no such thing as “what’s mine is mine, what’s yours is yours.” At least not absolutely. You share the same conveniences so you both have to pay for them. A regular one-bedroom condo for rent in the Philippines usually comes at Php12,000 to Php25,000 depending on the location. Are you going to split the rent in half or will the other pay 70% of the rent because he or she makes more money? How about the dues? What about the utilities? Who will pay for the groceries?
You will share a lot of things as a couple. Even parking space and gas. You will share a Netflix subscription or a Wi-Fi connection. It is apparent that you divide the financial responsibility in a manner that works for the both of you. List down all your monthly obligations against your income and decide how you will split them.
Till debt do us part
As a couple, should you share the debt? There are instances when your partner has an existing loan before you got married or decided to live together. There are instances where your partner has so much credit card debt because of all the traveling he or she did before moving in with you. How should you handle this?
It starts with being honest about it. Put your debt out there and be honest about your capability to pay them off. If you need help, say so. If your partner is willing to help out, well and good. If not, talk to him or her about the possibility of shouldering the smaller bills until you are able to pay your debt.
Joint or individual
Are you going to pool your resources together in a joint account? Or are you just going to pay for your share from your individual accounts? Even married couples don’t necessarily have to maintain a joint account so you have to really think this through.
Traditionally, when a couple gets married, they are expected to merge their income and expenses. It is also seen as a symbolic gesture. Having a joint account gives each spouse access to money when they need it and there’s a smaller chance of encountering financial “surprises.” However, joint accounts also make some couples feel that they have lost financial independence and it may also cause some serious problems.
What’s it going to be? A survey found that 42% of those in a relationship who have joint savings accounts also maintain individual accounts. Do you think this will work for you? In this case, you use the joint account for joint finances such as rent, utilities, insurance, etc. The key here is to make sure you fulfill your end of the deal, individual or joint.
What about the guilty pleasures?
If your wife or girlfriend likes to splurge on bags and shoes, do you also share the costs? If your husband or boyfriend likes to collect comic figures or likes to buy the latest Lebron-approved shoes, do you also share the costs?
If you are working on how to combine finances with your spouse but you simply can’t tolerate certain purchases, you have to be honest about it. Set some limits if possible. Make sure that your partner was able to fulfill his or her monthly responsibilities first before splurging on anything. For individual pleasures, it would be best if the partner is not obliged to share, unless he or she offers.
All about setting a budget
Couples always talk about having a budget, but not all are able to stick to it. Talk about budget categories such as rent, food, entertainment, and savings. However, it’s not enough that you make a list. You also need to track your budget. If after a month you realized you spent way too much on entertainment or dining out, you need to figure out a way to cut back. This is where condo living in the Philippines becomes an advantage because there are a lot of activities you can do in your condo or within your community without breaking the bank. Use the old school envelope system to make sure you don’t go over budget or try these tips when you’re on a tight budget.
Share financial goals
Managing finances with your spouse means you don’t only talk about expenses but also financial goals. As a couple, you must set targets. This will also inspire you to nurture the relationship. If you plan to have your own home after five years, pay off your debt in a year or get a new car in two years, then you share a common goal. Sharing financial goals keeps you motivated and makes you feel like you really have a partner who wants the same things.
Moving in together is so much more than keeping the toilet seat down. It is more than just not putting your feet up on the table. It is about sharing a life together and truly wanting to stay together. Finances may be a sensitive subject matter, but it can break you if you don’t discuss it early on. Be honest and always have the best intention for your partner.