You and your partner could be completely compatible in every way possible, but when it comes to money… tensions can rise. To make life easier you and your partner must find financial harmony and agree on some major financial and life goals.
You and your partner need to decide what kind of life you would like to share. Do you want to buy a house? travel? or get a car together?. Start by estimating how much you would need to save to make these goals a reality. Focus on your timeline in relation to when you hope to achieve these goals by. Is it a year? two years or five years time?. For example, if you wish to buy a car together in 5 years worth €12,000 and you do not wish to take a loan out, then you will need to save €200 a month for the next 60 months.
When this exercise is complete and you realise what your major financial goals are, it is likely that you may find that it simply is not possible to save enough to achieve everything you desire. At this point you must decide what is important to both of you and which goals you are willing to sacrifice in your short and long-term aspirations.
If you can both create a common vision by agreeing what type of life you wish to have together, then you will experience one of the key components to a life with less tension with your partner.
Start by making a list of any debts you owe. Debts such as student loans, mortgage, car, credit card or money you may have borrowed from family and friends. Make a plan on how you can reduce these debts, for example: perhaps you may wish to contribute extra money towards a particular debt that has the highest interest rate. Alternatively you might wish to focus on a smaller loan to try and wipe it off the list altogether.
Whatever direction you both decide on, you and your partner will need to agree on the following: the timeline, the contribution, and whether you have separate or partially merged finances. It is also important to consider future debts and how you will approach repayments. Questions that are important here would be: What new debts are you willing to take on? How will you make decisions about these debts and what boundaries will you have in relation to repayments?.
We know you may be young and retirement seems a million years away, but it is extremely important to start talking about your retirement plans. For example: When do each of you want to retire? Will you retire at the same time? What type of retirement lifestyle would you like? Will there be any major expenses you need to allow for such as travelling? Will you help support your children or grandchildren’s education or wedding costs? What might your health and long-term care expenses look like?
When you face the harder questions and make decisions, you will start to feel relief because you will know that you and your partner have a shared vision for the future. Strengthening your financial future by working together with common goals and saving plans will not only strengthen your financial security, but also your relationship.
Remember we are here to help you: To discuss your financial requirements, please contact a member of our financial specialist team today. We will happily talk you through your options for the future and take some stresses and strains out of your planning, especially when you are not quite sure where to begin.