Strong relationships are built, naturally, together – with mutual trust, gainful transparency and a joint determination to plan the best possible future together. These facets of a relationship are just as crucial to a healthy financial situation as they are to a healthy emotional connection – and can give you a great deal of financial security as you start to plan your life together properly. Conjoining your finances can be scary, but also invaluable; here’s how to approach making shrewd financial decisions that benefit you as a team.
Trust, Growth and the Future
Transparency about your goals is one important piece of the puzzle, as you want to be rowing in the same direction. Do you want the same things, and do your timescales line up? Now is the time to hash out any disagreements you may have about the timing of buying a home, travelling, or having children. More important, though, is transparency about your individual financial situations. Outstanding debts or ongoing payment obligations should be shared, so that no one private decision derails an otherwise excellent joint financial plan.
Tackling Debts Together
With this in mind, it is also important that you tackle any such issues or challenges together. Between the two of you, you might have a number of small debts in the form of overdrafts, credit cards or personal loans. It is absolutely fine, and even somewhat shrewd, to tackle these separately – so that one of you does not become responsible for the other’s debt. However, your approach to reducing your individual debts can be unified, so that you both come out as efficiently and strongly as possible.
In the case of having multiple different sources of debt, debt consolidation loans are a useful provision. They pay off your lenders and place the full value of your outstanding debt in one place – with one interest rate and one set of repayment terms. This is a much easier figure to fold into joint finance planning than multiple payments with multiple interest rates!
Setting a Joint Financial Plan
The final step, then, is to create a financial plan together. With your goals in harmony and your individual debts under control, you can start to chart a path towards those big life milestones. A joint current account can be useful for consolidating household outgoings, while separate savings accounts allow you to maximise interest on savings.
Keeping your savings separate can be especially useful for buying your first home, as you can both hold Lifetime ISAs and effectively double your returns in the process. There are myriad tips like this that can make your joint finances work better for you – illustrating the power of teamwork when it comes to your finances.
