Money is a contentious topic in the dating world. Dates can go sour because each person has a differing opinion about who is responsible for paying the bill. Is it the person who planned the date? Should you split the check? Should the one who doesn’t pay cover the costs of the next date? This simple question could cause a lot of tension between a budding couple and cause the romance to fizzle.
Money doesn’t become an easier topic to handle as relationships progress. It can still cause a lot of tension and confusion. So how can long-term couples manage their finances effectively?
Get Joint Accounts for Joint Goals
Have you been in a relationship for years? Do you live together? Do you split expenses? Then, you should consider getting joint accounts.
A joint checking account is an ideal banking option for managing your shared goals. Those shared goals can be recurring bills, groceries, insurance payments, rent/mortgage payments and more. If you’re worried about who is responsible for sending these payments out of the joint account, you can automate these payments to remove the task from both of your to-do lists.
A joint savings account can be used for shared goals like emergency savings, vacations, home improvements or college funds.
To help you organize your joint accounts, put together a household budget together. There are budgeting apps specifically designed for couples, like Honey due and Firstly.
Get Separate Accounts for Personal Goals
You don’t have to share every single bank account. In fact, you should have a personal checking account or savings account that you don’t split with your partner. This allows you the freedom to make personal spending decisions without your partner’s direct oversight or participation, and it will allow your partner to do the same. Reserve this type of account for spending on hobbies, clothing, fitness and other personal expenses.
Separate accounts aren’t just good for maintaining a sense of privacy and independence over your finances. They are also good safety nets in the worst-case scenarios. Having access to a collection of personal savings will make it much easier to leave financially abusive relationships.
Save for Household Emergencies
A single emergency expense could throw your financial plans into disarray, so it’s important to set up a household emergency fund. The safety net will help you recover from this expense quickly and get back to your “normal” day-to-day.
What’s an emergency expense? It’s an urgent and unplanned expense. You couldn’t have predicted it, and you certainly can’t ignore it until it’s a more convenient time. You’ll have to respond to it right away.
For instance, your dog gets incredibly sick after getting into the garbage and eating something mysterious. You have to rush them over to the veterinary clinic and get them treated right away. That veterinary bill could be considered an emergency expense.
Or your car breaks down on a lonely stretch of highway. You need to call up a tow truck to bring your car to the nearest mechanic and get it fixed. The cost of the tow truck and the subsequent repairs are emergency expenses.
Put together an emergency fund so that you can use savings to cover these expenses immediately without disrupting your budget.
What if you don’t have enough in your fund? If you don’t have enough savings sitting in your emergency fund, you’ll have to find an alternative method for covering your urgent expense. One option for this is to apply for a personal line of credit online. With an approved personal line of credit, you can request a withdrawal within your credit limit. If that request goes through, the withdrawal is then deposited into your bank account, where you can use it to pay for the urgent expense. Afterward, you can focus on the line of credit’s repayment process. A credit card is another useful alternative when you don’t have enough savings in your emergency fund. You can charge the expense to your card and then make repayments through your regular billing cycle.
Prepare for Hardships
No couple wants to discuss difficult financial topics, like what will happen if one of you falls seriously ill or passes away. It’s not exactly a fun “date night” conversation. But when you’re in a serious relationship, you should try your best to financially prepare for hardships.
How can you do this? Start by signing up for a life insurance policy. If you list your partner as a beneficiary, they may be able to access a sum of money upon your death. This money could be used to help them manage financial circumstances surrounding your passing, like medical bills and funeral costs.
Another goal to consider is putting together a will. This is especially important for couples who have children together. A will can help you establish who gains access to your assets when you are gone, along with who becomes the legal guardians of your children. Don’t let financial topics put a rift in your relationship. Follow these tips and manage your money together.
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