Ways to Stop Joint Finances Ruining Your Relationship
Divorce rates vary around the world, but in the UK and US forecasts put the rate above 40%. Those are marriages, but of course you can add to that broken relationships, when live in partners split up. When it comes to living together, the average length of the relationship in the UK is only about 39 months. That is not very long, but long enough to do serious damage to your finances if you are not careful.
Those divorce and break up rates are often fueled by financial problems, which further accentuates the need to get finances on a firm footing right at the start. You also need to give money priority, on a regular basis, as a subject of joint discussion; that will be good for your relationship, and good for the health of your finances.
If you want to avert financial problems, and relationship problems caused by finances, then there is a need to at least set out a few ground rules right from the start. Here are just a few suggestions:
1. Get together at least once a month to discuss the month's budget. Set out a home budget that you can easily agree to at the start. Do so in a relaxed frame of mind, not confrontational.
2. When you discuss your budget, talk about savings as well as spending, and agree what you are saving for, whether specific, general saving fund or for cash emergencies.
3. Neither party should borrow without discussing it with the other and agreeing. Joint credit is a minefield. If at all possible, do not borrow at all, it can be a source of big problems later, and in many circumstances is not good for your long term wealth.
4. Be prepared to discuss priorities openly, and discuss sensibly how you can cut down on spending and deal with the consequences. If you have to make sacrifices, then supporting each other in so doing could strengthen your relationship.
The important thing with joint finances is to always remember that your partner is affected by whatever you do, and vice versa. Openness is therefore essential if you are not to store up problems for later.
Also: Joint Credit