Set yourself up for financial success in a relationship

The start of a new relationship is so exciting. Hot dates, getting to know one another – it can be one of the best times of your life. But there can also be a serious side to consider among the good times.

It’s easy to forget there may be financial consequences when you enter a relationship. But if you start off on the right foot financially, it can help ensure you’re not financially compromised down the track and even build a closer relationship. So here are some steps to follow to develop sound financial practices when you are romantically involved.

Talking about money at the start of the relationship can be a difficult conversation. But it’s important to discuss your thoughts about this important topic to ensure you are compatible in this area along with all your other shared interests. In fact, although it may not sound super romantic, it’s an idea to schedule money dates, even early on in the relationship. Have a picnic or go to dinner somewhere nice to make it fun.

Start by talking about your attitudes to spending and savings. You don’t necessarily need to disclose how much you earn. But it’s important to discuss what you think about saving, investing and spending. You also don’t necessarily need to agree on everything – and learning to agree to disagree can be an important part of the relationship-building process in the early days. But it’s important to understand if you do have areas of difference so these don’t become points of friction later.

As the relationship progresses, some couples choose to open joint accounts from which shared expenses can be paid – things like groceries, bills and even fun stuff like holidays. Others prefer to keep their finances separate. There’s no right or wrong option. The choice you make will depend on what both sides are happy with. What’s important is to choose the option with which you are most comfortable.

Once you have set the financial ground rules, take the time to jointly put together a budget. This means working out who pays for what, what you want to spend on joint expenses and also any other savings and investment goals you may have. Jointly saving for a shared goal like your first big holiday together is a great way to work on something important together.

If you decide to take out a credit card, mortgage or any other financial product with your partner, make sure you understand what you are agreeing to. In many cases, if the relationship ends for any reason, and your partner cannot meet their loan repayments, it will be up to you to pay off the loan. Think carefully about whether you can afford to do this before agreeing to jointly take out any financial product. ClearScore's offers are a great place to start when you have decided to take out a financial product together. You can easily search for a range of financial products and compare what different financial institutions offer in terms of interest rates and other features.

It’s also important to understand that if your partner is unable to pay back their share of any loan and you default, your credit score may be affected if the loan is jointly in your names. Talking through your credit report is also a good way to find out about your partner’s past history repaying money they have borrowed. Go to ClearScore today to check your credit score for free.

If you do jointly take out a mortgage or any other loan, it may be an idea for one or both of you to explore taking out life, trauma or total and permanent disability insurance. This means that in the event you suffer an accident or illness and can’t work, a payout from your insurance policy may be able to cover your cost of living including any loan obligations. This can give both sides peace of mind.

Being part of a financially responsible couple is a great way to build wealth over time. The idea is to set your goals and expectations early in the relationship to ensure you have a healthy financial and romantic future together.