If you haven’t had the money talk, here are the top 10 things to discuss with your partner early on.
Whether or not money issues got in the way of past relationships, you may be thinking, there’s no way you’re going to pull back on that long passionate kiss you might get this evening to drop the f bomb (I’m talking about your ‘financial expectations’ going forward).
If you’re still in the honeymoon period, not wanting to have these conversations may make total sense (unless of course, you’re about to wire some overseas lover you’ve never met in person your life savings).
If you have been together for a while though or are edging on making a big financial decision together, having the money talk could make a big difference to whether you go the distance.
Understandably, it may not be the easiest topic to broach, so here’s a bit of a checklist as to what you might discuss, depending on what you have planned going forward.
Your views on cash management
Talk to your partner about your views around spending and saving. Kicking off with a light-hearted conversation, without judgement, can often be a good place to start.
You might even want to share some examples of things in the past that may have influenced your current views and behaviours. For instance, your last partner may have spent all their money on beer and takeaway food, while you were often left to cover their share of the bills.
Sneaky spending habits if you have any
More than one in four Aussies has lied or been lied to about money by a partner, with hidden debt and secret spending two common contributing factors1.
With that in mind, if there are a couple of common transactions you make that you know you haven’t always been forthcoming about (how many shopping purchases are you really hiding in the car or closet?), now may be a good time to get that out in the open.
Your income, expenses, assets and debts
Your financial situation is an important one to talk about because even if you’re both earning a decent income (and potentially have some assets behind you), big expenses and potentially thousands of dollars of debt between you may impact any plans you have in the short and longer term.
The average credit card balance for instance is around $2,876 in Australia2, not taking into account other loans people may have taken out, such as car loans, student loans and through buy now pay later services.
Whether you’ve been paying your bills on time
If you’ve got a credit card, personal loan, mobile phone plan or utility account, there’s more than likely a credit reporting agency out there that has a file with your name on it. This file, also known as a credit report, will summarise how good you’ve been at paying your bills and making your repayments on time.
If you have a chequered history, your report mightn’t read particularly well, and this could affect your ability to borrow money for a range of things, which may include a house for the two of you. Meanwhile, if you’re unsure how your report reads, you can request a copy from one of the reporting agencies (Equifax, Experian, illion or the Tasmanian Collection Service).
What’s on your bucket list now and down the track
If one of you has plans to travel, buy property, get married or have children and the other doesn’t, this could raise issues (or perhaps opportunities) for further discussion.
Depending on how important these things are to you or your partner, it may be worth nutting this out early on, or if you don’t come to a solution, knowing that it’s something you’d like to raise again at a later date.
What a joint budget and savings plan might look like
Committing to something that you both think is fair could go a really long way here. If you’re not sure where to start, a good first step might be drawing up what money is coming in, what money is needed for the mandatory stuff and what may be left over for your social life and savings.
While not everything has to be shared, if one person’s saving more and the other’s spending more, arguments may arise, so try to come to an agreement that works for both of you
Your job security and whether you see a change on the cards
If you’re on the verge of quitting your job or are aware of redundancies happening at work, this is probably worth flagging with your partner as well.
Speaking up so the other isn’t caught off guard could make a big difference to the holiday, wedding or new-car plan that you’re working on as a team.
Your contingency plan if one of you isn’t earning an income
Approximately one in five Aussies has no emergency savings to keep them afloat when faced with unforeseen circumstances3 , so it’s probably worth talking about whether either of you have an emergency stash of cash, personal insurance, or anything that may help you get by through a tough period.
If you don’t have a plan b, now might be the time to talk about how you can create one together. Plus, it may reduce the need to rely on high interest borrowing options, such as credit cards or payday loans, which can often be an expensive way to borrow.
It might not be a nice thing to think about, but an emergency fund may also be invaluable if the relationship ends, as this could provide you with greater options than if you’re dependent on someone.
How you’ll divide costs and or repayments
You may decide to tackle this 50/50 or proportionate to each other’s income. That is something you’ll want to nut out before you take on a big financial commitment together, like renting a property together for example.
You might also want to take into consideration anything additional either of you bring to the table, like caregiving, domestic duties such as cooking and cleaning, or other forms of income or assets.
Potential risks that may arise if you merge your money
If your partner defaults on a repayment, you may be liable for the amount owing, even if your relationship ends. On top of that, ignorance isn’t an excuse, so if you sign papers you don’t understand, you’re no less liable for any loans or guarantees you may have signed off on.
With that in mind, it’s important both of you understand your responsibilities and consider whether you want to put anything you might agree to in writing.
1 Finder – Debt deception: 2.7 million Australians have lied to their partners about money – Feb 2021
2 Finder – Australian credit card and debit card statistics – Dec 2021
3 Finder – Saving hard or hardly saving: Millions of households have no emergency savings – June 2021
Source: AMP February 2022
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