When we begin to live together with a loved one or get married, we are in a romantic mood and excited about our future together. This is a time when sharing daily expenses, the coveted income from playing here: https://nationalcasino.com/en_nz , possible financial difficulties, and other practical considerations seem distant and unimportant.
Sometimes thoughts of a young family’s budget and cost-sharing do come to mind. Often, however, even the people closest to you do not feel comfortable discussing these topics, and they try to avoid them in every way possible. In fact, it is best to discuss these issues as early as possible to avoid unpleasant surprises in the future. Having agreed on family finances in time, you will save yourself from quarrels and disappointments in the future.
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How to Divide the Daily Expenses
You, as a couple, will inevitably come to this question quite soon. Chances are, one partner’s income will be greater than the other’s. Here are a few tips on how to effectively divide expenses when partners’ incomes differ.
- First, you need to agree on whether you will split the expenses in half or keep the proportion of income and when splitting expenses, such as 60:40 or 70:30.
- If a 50:50 split is very important to both of you, make sure that the partner who earns less can still lead an equal lifestyle and save something.
- Splitwise or Tricount apps can help with calculating and honestly splitting daily expenses. In them, you can enter expenses and keep track of the balance – who spent more and by how much.
If you use Splitwise apps all the time, you shouldn’t get carried away and mark every little expense in them. It’s best if you agree to use apps only for bills or relatively large purchases. Remember that most purchases are made for your overall well-being, so it doesn’t make sense to count every cent.
Another strategy is to separate expenses by areas, such as one paying bills and the other buying groceries and other household goods for the home. Whichever model seems closer to you, be sure to discuss any doubts with your partner.
How to Prepare for Unexpected Expenses?
Saving for a “rainy day” – This is an important part of the family budget of every young family. Experts believe that it is advisable to have such savings so that if necessary (for example, in case of loss of a job or during a prolonged illness) one can pay bills and other absolutely necessary expenses within 3-6 months.
How to Start Saving? And Where is the Best Place to Keep the Accumulated Funds?
Each couple will have their own most convenient format for creating savings. Some people like to put their money in an actual tangible piggy bank, but more reliable and convenient solutions are also available these days. Here are a few tips.
- Open a separate bank account into which you both transfer a specific amount, such as 40 dollars per month.
- Use the automatic payments service offered by banks – thanks to it you will not be able to forget to make a payment or for any reason evade it.
- Do not keep money in accounts that are not easy to access in case of need. If you have a savings account at a bank make sure that you will not be penalized if you withdraw your money.
- Try not to keep money in the same account from which you pay for your daily needs – it’s important to separate your finances and specify for self-discipline purposes that these funds are for emergencies only.
- Set a financial goal for your savings, such as saving 1,000 dollars in six months or a year. This goal should be realistic and in line with your budget so that you can stick to the plan each month.
It is important to make sure that there are no exceptions and that you make saving a priority – for example, you can’t afford to put money in one month because you had to spend a lot on entertainment or clothes shopping.
In cases where there is no extra money at all, examine your spending habits and you will likely still find some area in which you could spend less.
How Do I Plan for Big Purchases?
There comes a time in every couple’s life when you have to prepare for a big purchase. A large purchase can be considered a product or service that costs more than 500 euros. But depending on your family’s income, this amount could be more or less. A big purchase could be appliances, a car, an apartment renovation, a trip, or a new apartment. Whatever it is, a big purchase affects a relationship in a deeper way than everyday expenses, so partners must discuss it with each other.
Tips to Consider Before Making a Big Purchase
- Evaluate how it will affect your monthly budget. Ideally, the impact should not be significant, and it is definitely not advisable to set aside your emergency savings for such a purchase.
- Weigh the need for the purchase and choose the best time to make it. It is best to plan such purchases a couple of months in advance, saving up in time and learning what time is most advantageous for the purchase (e.g., discounts, seasonal sales).
- Buying such valuable property as a car or apartment, carefully weigh everything and discuss who will be the owner, or agree on the division of property rights.
- If you are taking out a loan for a major purchase, make sure that monthly payments do not exceed 30-40% of the family income.
- If you have agreed to pay back the money equally, that agreement should be respected. In unforeseen situations where your partner can’t pay back their portion, support them, and you can expect the same treatment in return next time.
What Is Imperative to Discuss Before Starting a Life Together?
The amount of salary is important to agree on a fair division of expenses and other practical matters.
- Order of payment of bills. Will each of you be responsible for certain bills or will you pay them all from the same bank account, sharing expenses afterward?
- Debts are a topic that you should definitely discuss on time and be completely honest with your partner. If, after a long time together, you suddenly discover that you have unpaid debts, your partner may become frustrated and upset. Also, when you get married, your debts are effectively split in half.
- Credit rating because could potentially affect your ability to buy a car or an apartment. You can also work together to gradually improve it, such as by paying off loans on time or paying bills on your own behalf (for more information on improving your credit rating, click here)
- Savings – talk about how much each month you plan to save and for what purposes. By agreeing in time that you want to open a joint account for travel or buying an apartment, you can more effectively save the amount you need.
- Retirement funds. It’s perfectly normal to discuss setting up savings for your old age promptly. If you later discover that your partner’s views on setting up a retirement fund are radically different from yours, it can be a great upset. As paradoxical as it may sound, it is the younger years that are the best time to start taking care of decent retirement life.
- It is important to realize that money in a relationship has more than just material significance. The family budget is an important emotional foundation upon which well-being and a harmonious atmosphere in the home are built. Every young family’s situation is unique, but boundaries should never be violated – for example, you can’t use your partner’s credit card or take money from their wallet without permission.
- Also, excessive control of your life partner’s wallet can cause unnecessary stress. Therefore, it is advisable to agree that in the area of finances you will also retain some freedom, leaving some of the income solely for your own needs and satisfaction of your desires without control of your partner.
