When it comes to love, the happiness and joy is so overwhelming that you lose sight of your wallet. Now, is this a cold statement? Perhaps it is, but there are serious, factual things to consider before going into joint debt or joint purchases with your loved one before you are sure that (a) you love him or her, and (b) you understand the consequences very carefully.
Let’s not kill the idea of love. Love is and should be more important than money. But money matters also. A couple without money could soon become a divorced couple, or a couple that will lose that sparkling feeling.
Let’s take a closer look at the relationship between Love and Money:
What to discuss
If you are in a serious relationship and you are ready to move into sharing accounts, you do need to sit down and discuss these important points.
- The future
Be honest with each other regarding the future. Are your goals on the same level? Do you both intend on wanting to have children, and if so, what does this mean in regards to work situations? Would this put a strain on the financial situation? Once you discuss your goals, you will have a better understanding of the plans for the future regarding both your relationship and financial situation.
- The present
At the moment, who is the bigger spender? Who is the one who pays for mostly everything without asking a question? Is there one of you who lends money and then asks for it back? This will tell you a great deal about the future of your relationship and how things will progress. Also, if a partner cannot honour a payment, such as a mobile phone bill, will this hurt you in the long-run?
- The past
Look in the past. Speak about the past openly and honestly. Were you always a responsible person when it came to money? Did you save as much as you could and did you have a sound superannuation strategy in place? Or did you spend a lot of your earnings on things such as a new car and boozy nights on the town? What were your partner’s behaviours and are these behaviours ones that you can rely on?
The law has this to say about money and love:
- If your partner defaults on a joint loan, you may be liable for the whole amount.
- If the water and electricity are in your name, then you are solely responsible for the account. The Courts don’t factor in your love life.
By considering these important factors at the start of a potential long-term relationship, you’re giving yourself and your loved one the best chance at establishing a strong financial situation that will see you through until you grow old together.
If you need more information about any of these points or want to speak to a professional accountant, call us on 03 9853 0641.
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