For couples deciding to move in together, the idea of buying a home and building a future can be very exciting, and prompt a lot of discussion. Conversations around shared finances and where one another stands on money – in particular, financial goals and obligations – don’t seem to generate the same enthusiasm.
According to the Australian Bureau of Statistics (ABS), in 2019 there were 113,815 marriages. Sadly in the same year there were 2,162 divorces, with financial issues cited as one of the major reasons for marriage breakdown.
For couples deciding to move in together, the idea of buying a home and building a future can be very exciting, and prompt a lot of discussion.
Conversations around shared finances and where one another stands on money – in particular, financial goals and obligations – don’t seem to generate the same enthusiasm.
Nevertheless, these are the discussions that need to take place as they can impact everything from where you live, to children, schools and lifestyle.
For example, what if you tended to use credit to buy the things you wanted, while your partner was debt-averse and preferred to save up? How would conversations around buying household items go?
Additionally, existing debt has the potential to cause considerable problems in relationships; nobody likes financial surprises.
When Chris a restauranteur, and Noel a marketing manager, decided to buy a home together, they were so compatible that they agreed on location, style and even budget without the need for any serious discussion.
Imagine their surprise when their joint application for a mortgage was declined.
Turns out, that several years ago Chris had taken a business loan to buy the restaurant. The business had undergone some teething problems and as a result Chris’s credit score had been impacted.
Noel’s income alone was not sufficient to cover the mortgage so the couple was unable to buy their dream home.
The resulting disappointment and arguments could have been avoided had they discussed their debts and financial arrangements.
Similarly, consider other financial discussions around:
Establishing agreed goals around these subjects early can set expectation and facilitate strategic financial planning.
But what if you have different goals?
Couples unable to agree, or misunderstanding one another’s goals, may encounter difficulties down the track when decisions need to be made. Communication is key in relationships but if talking about money is difficult, start by setting a budget based on income and expenses – and honesty.
If these discussions feel too uncomfortable, the Australian government offers an assistance service. Contact the National Debt Helpline on 1800 007 007 to speak with a financial counsellor. Additional services are available for small business owners, farmers or people in regional areas.
Alternatively, kick off those discussions by introducing your partner to your financial adviser. You don’t have to have the same goals, but by creating a plan that suits everyone’s needs, you’re off to a good start.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
Shanley Financial Planning Pty Ltd trading as Steve May Financial Services (ABN 19 612 825 180) is a Corporate Authorised Representative of (1265706) of Sensibly Pty Ltd (AFSL 533923)
Nick Shanley, Steve May and Luke Styles are Authorised Representatives of Sensibly Pty Ltd (AFSL 533923)