There are many things that can break a relationship. The most common ones include infidelity, differences in life goals, and poor communication and conflict resolution skills.
Here’s another common deal breaker that’s seldom mentioned – money.
Money is needed for many things including basic needs such as meals, rent, transport and clothes. These are all items that you’ll spend on when you’re single and also when you’re in a relationship.
The difference between the two is that in the latter, there are two people who are making joint decisions that impact the finances of both parties.
Never too early in a relationship to talk about money
Contrary to belief, it’s not rude to talk about money from the first date. You may not notice it but the topic of money already presents itself on the first date: Who pays for the bill?
Many of us have been brought up with the idea that the male picks up the bill, regardless if he’s your date, boyfriend or husband. However, both Singaporean males and females are capable of earning their own keep. So, there are many males who think that the bill should be split right from the first date.
If you’re both not on the same page with this basic money question, there’s a high chance that there will be more money troubles down the road.
As you progress further in your relationship, other matters will pop up. These can only be handled smoothly when both of you are compatible in terms of financial planning and management.
Why financial planning as a couple is important right from the start
As your relationship progresses from the early dating phase through to a committed relationship and marriage, it also goes through different stages of financial commitment.
Here are 9 money decisions that will make or break a couple.
#1 One of you earns much more than the other. How do you split the bill? Would this also affect where you both choose to dine or the activities to do?
#2 You’re taking a couple’s trip. Who pays for the air tickets and accommodation? Does the male also pay for the female’s shopping?
#3 Special dates such as an anniversary or a birthday. Should there be lavish celebrations or not? Do you buy gifts for each other and would there be a limit on the price of the item?
#4 You’re planning the wedding. How much is the limit for total expenses?
#5 You’re planning to buy a home together. How much of the mortgage will each person be paying for? What’s the budget for the renovation and furnishing?
#6 You’ve started living together. How are household expenses covered?
#7 You’ve decided to start a family. How do you start saving for this additional family member?
#8 Emergencies such as health issues, accidents or sudden loss of job. What happens in such cases?
#9 You’ve both decided to divorce. How will assets be split? What about the proportion of spousal and/or child support? Although the marriage has ended, for couples who have kids, it’s in the interest of keeping things civil without battling for money.
Five money topics every couple should discuss
Want to avoid letting these money stressors break your relationship? Then start planning your finances together with discussions about the following topics.
#1 Existing debt or investments
Do you have a study loan? Or a credit card debt? Perhaps you have an investment linked insurance policy with an annual top-up amount. These are important information that both partners should know as they affect your saving and spending ability.
#2 Monthly disposable income
More than how much you make each month, it’s important to know each person’s monthly disposable income (monthly income less debts/loans, bills, insurance, savings and necessary expenditure such as transport, rent and food). This will give both of you an idea of how much you have available to spend on stuff such as holidays, gifts and saving towards your own home.
#3 Decision making
How will the both of you make a decision on expenditure? Come up with a framework for discussing and making agreements about expenses, whether it’s one person buying a car or both of you deciding to take a holiday.
#4 Joint expenses
When you’re still dating, there are shared expenses such as staycations, holidays overseas or activities together. When you’re married, there are monthly household expenses. Agree on what you consider joint expenses and how these will be settled between both of you.
#5 Transparency
You don’t have to show each other your bank statements or salary slips. Transparency here refers to both of you agreeing on how you’re handling joint expenses and whatever is left of your personal assets, you can use that for your personal decisions.