Fallen in love? Eight tips to help new couples manage their money together

Couples’ commitment – whether it is marriage, moving in or making a major purchase together – is an exciting step, but it comes with many challenges.

So if you’ve met someone compatible and are thinking about taking your relationship to the next phase, one of the most important things to consider at the outset is how to manage your finances together. Here’s some food for thought:

Managing your finances as a couple in a responsible and sustainable way is an important part of any relationship.Credit: Getty

1. Discuss Your Financial Goals And Values. Before moving in together, it’s important to have an open and honest conversation about your financial goals and values.

This includes discussing your income, debts, savings and spending habits. It’s important to be on the same page about your financial priorities and to have a plan for how you will achieve your goals together.

Review your goals and objectives regularly and make sure to discuss any changes in your financial situation, especially about any financial concerns or challenges you may be facing.

2. Consider The “What If We Don’t Work Out” Scenario. Having this discussion upfront will also help alleviate potential arguments or disputes if the relationship does not work out.

Understand how you can build your joint future together as well as protect yourself in case things don’t work out.

In most states, de facto couples living together for more than 12 months are regarded as “married” under family law and if a partner can claim financial dependency, they may be able to claim on your assets when the relationship ends (precedence has been set in many legal cases).

3. Binding financial agreements. If there are existing assets prior to becoming a lived-in couple it would be useful to have a binding financial agreement drawn up. These agreements can be entered into at any time during the relationship.

For parents concerned about protecting the family wealth, approach this topic delicately with your child and their partner. This can help ensure the conversation is held objectively and minimises the emotional burden on your children.

4. Budgeting and splitting expenses. Creating a budget is an essential step in managing your finances as a couple. This will help you to keep track of expenses and ensure that you are living within your means.

Include all of your joint expenses, such as rent, utilities, groceries and entertainment. It’s also a good idea to set aside some money for unexpected expenses and emergencies.

There are several ways to split expenses as a couple. Some couples choose to split everything 50/50, while others prefer to divide expenses based on their income.

It’s important to find a method that works for both of you and to be open to adjusting it as your circumstances change.

5. Joint or separate accounts? Opening a joint account can be a convenient way to manage your shared expenses. This allows you to pool your money together and to pay bills and other expenses from one account.

However, it’s important to discuss the rules and responsibilities associated with a joint account before opening one. To protect each other, it can be prudent to ensure this account has the appropriate signatory authority (signed jointly versus anyone to sign).

6. Retain your financial independence. Regardless of how long you have been together, it’s always advisable to have some financial independence. It could be as simple as having your own bank account or investments that you control.

This ensures you have access to funds for your personal benefit or emergencies without impacting any joint commitments or expenses.

7. Save for the future. Moving in together is a big step, and it’s important to plan for the future. This includes setting aside money for long-term goals such as buying a home or starting a family.

It’s also a good idea to start saving for retirement and to ensure that you have adequate insurance coverage.

Review your superannuation fund beneficiary nominations to ensure you have nominated the right recipient, and review your insurances for the right level of cover to protect yourself and your loved ones.

8. Seek professional advice. Understand how you can build your joint future together as well as protect yourself in case things don’t work out. This is especially important if there are large discrepancies in the assets/income you bring into the relationship.

The best way to do this is to seek professional advice from a financial adviser, tax adviser, or even a legal specialist if you have a complex financial situation or assets.

For people receiving Centrelink benefits, it is also important to seek advice to understand how coupledom might impact your entitlements, as assets and income test thresholds differ for singles and couples.

All these steps will put you on your way to managing your finances as a couple in a responsible and sustainable way. Good luck in love!

Grace Bacon is the Director of RSM Financial Services Australia (AFSL 238 282), advising clients on wealth management, retirement planning and succession planning.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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