On the surface, Sarah and Tom are the picture-perfect couple. But there is one thing that threatens to divide them. Sarah isn’t one to spend her money frivolously, always planning for a rainy day and setting what she can aside for the future. Tom is a big spender, often impulsively buying what he wants without a second thought.
Despite their financial differences, their love grows, and they consider moving in together. Tom celebrates the idea while something nags incessantly at Sarah. They are compatible in every other way, but Sarah doesn’t entirely trust she can have a comfortable life with him. Could his opposing spending habits ultimately put a strain on their relationship?
Feeling as deeply in love as she did, Sarah sought answers and stumbled upon these ten tips for couples with opposite saving habits moving in together.
1. Be Honest About Your Spending Habits and Values
Both parties need to put all of their cards on the table. Whether you save every penny or tend to spend a little more freely, it shouldn’t surprise your significant other. Have an honest conversation, but don’t ridicule or criticize the other’s financial values. Knowing where everyone stands can easily determine the best path forward.
2. Create a Budget Together
Since you’ll be living under one roof, there should be an understanding of what money is needed to live comfortably. Create one household budget that incorporates every bill and mandatory payment. The budget should also include the money each person will contribute and save. That amount doesn’t have to be equal if both parties agree and there’s a disparity in pay.
3. Plan Out Who Pays for What
One person is responsible for paying for the electricity while the other covers the water and gas. Splitting household utilities and assigning a primary payer for each develops good spending habits. Both parties know that if they don’t pay the electric bill, it will be turned off. This can be a reality check for the partner that loves to spend frivolously.
4. Keep Individual Finances Separate
Just because you’re crafting a joint budget doesn’t mean you should be commingling your funds. The concept of a one joint bank account is quite antiquated, and both individuals should have a solo account that only they can access. Not only does this create financial independence that may lead to good spending habits, but it also protects both parties in the event of a breakup.
5. Trial Run a Small Joint Account for Joint Expenses
That’s not to say you shouldn’t try a joint account. However, this should be small and dedicated only to paying the joint expenses such as household bills. When crafting your budget, determine the amount each person will deposit weekly, bi-weekly, or monthly. If it’s an uneven split due to a difference in pay, you need to both agree to it and be comfortable with the breakdown of funds. It’s important that this account be used only for household bills and joint expenses. Having this account helps establish financial trust, so long as no one pulls from it without consent.
6. Don’t Co-Sign Large Purchases/Leases
No matter how much you may love someone, unless you’re married, you should never co-sign something like a car or a lease that you’re not actively benefiting from or using. If, for any reason, payments default and the primary party refuses to pay, you, as a co-signer, will be financially responsible. You both may need to sign an apartment lease, but that’s an exception, as you’ll be living there and can continue to do so even if you separate.
7. Speak to a Financial Advisor Together
It may help to hear from a professional how negative spending habits can impact one’s future and relationship. Maybe the spender of the relationship was never really taught how to manage and save their money. A financial advisor can put them on the right path.
8. Set Financial Goals Before Moving In
If you’re moving in together, chances are you’re thinking of a long-term relationship. Pinpoint a financial goal you both share. It can be an annual vacation or buying a home within so many years. When you talk about budgeting, that goal should be a core focus to highlight the importance of saving.
You should also set individual goals, so long as they aren’t detrimental to the relationship. For example, one party’s goal shouldn’t be to buy an expensive car that results in a large payment and money not going toward the utilities they’re responsible for.
9. Try To Understand Each Other’s Financial Psychology
It’s possible that your partner’s spending habits stem from something deeply rooted in their past. Don’t make them feel bad or ridicule them. Talk it out, understand where they’re coming from, and have a real conversation. You may find that there’s something else going on that needs to be addressed.
10. Approach the Subject Ammicably and Cautiously
Money is a very touchy subject. It may not take a lot for the conversation to get heated. Be respectful of one another. Pay attention to what’s being said and how they’re saying it. If you feel that your partner is being less than forthcoming or is merely “Yes’ing” you, it may be time to admit that you’re simply incompatible.
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