In a survey of married people in Singapore, 90 percent of couples said they had financial disagreements about half the time.
Whether you are moving in with your partner, getting married, or planning to have a family together, it is a good idea to ask your partner financial questions to avoid potential conflicts across the board. When the two of you are not on the same page, making important financial decisions can be stressful.
However, these discussions can help your relationship grow. To help you get started, we have listed the most important topics to be covered.
1. Does your partner owe money?
One of the most important factors is how much and what debts your partner owes. For example, has your partner taken out an educational or business loan, or instead has a lot of credit card debt?
Discussing debt can be a sensitive topic for many, but you should have a general idea of how much your partner owes and how long it will take to repay the debt to avoid financial stress.
As a rule of thumb, “good” debts that can help you grow wealth over the long term (like education and home loans) are not a red flag until payments become unaffordable, but rather “bad” debts such as credit card debt or personal loan debt can move up quickly accumulate and potentially become a burden in the relationship.
If your partner owes quite a bit and is finding it difficult to make monthly payments, your partner might consider a debt consolidation loan.
These plans consolidate all of your debt into one large loan, usually with an effective interest rate of 6.5 percent – 10.5 percent annually for up to ten years, which makes them cheaper than many personal loans or a personal line of credit.
2. How much is your partner trying to save each month?
If your partner saves the recommended 20 percent of their monthly income, they can have a reputation for long-term financial health. However, if your partner is not saving money, it might be worth knowing the reasons behind it. For example, they could invest their income in government bonds.
Estimated earnings from an average savings account versus a high yield savings account
If your partner is looking to grow their savings, they can set up a high yield savings account to watch their savings grow. Alternatively, your partner could include monthly payments in a regular savings plan that invests in the stock market on their behalf.
The annual return can be up to 20.64 percent, depending on your risk tolerance. Note, however, that past results are not indicative of future results.
3. Who paid the bills when they grew up?
Another important question to ask your partner is whether mom and dad shared the bills, or whether one parent was responsible for paying all the bills. That way, you can better understand what to expect when it comes to sharing bills with you. This is especially relevant when you want to have a family.
It is very popular these days to split expenses based on your income so that everyone pays a relative amount equal to their salary. However, be sure to discuss spending habits beforehand as one person may be spending more than the other.
Some married couples even share a bank account to pay household expenses. The advantage of having a shared account is that you can both access it and pay bills.
Should something happen to you or your significant other, the funds are immediately available to one of you. However, shared accounts may not be the best for couples who have different ideas about how money should be spent and you care about keeping your expenses private.
ALSO READ: 3 Financial Questions To Ask Before Getting A Divorce
4. What are your partner’s hobbies?
Knowing your partner’s hobbies can help you see how they spend their money and what is important to them. For example, if your partner loves outdoor activities, they can use their leisure money on equipment and vacations.
If you love trading online or the latest in technology gadgets, your buck is where your money is.
This can be very important as some hobbies are more expensive and even more dangerous than others. For example, if your partner enjoys playing in their free time, you may need to discuss how this can affect your relationship.
5. Where does your partner see himself in five years?
Knowing their plans can help you take your own finances into account. For example, is your partner in the process of saving for an apartment? If so, does the budget and savings plan match yours?
If the two of you are looking to buy property together in the next five years, the two of you should be on the same page when it comes to a savings plan and the type of apartment you can afford.
On the other hand, your partner may want to start their own business or eventually move abroad. You should discuss these paths as they can change your financial plans.
Ask questions now so you can anticipate your finances
If your partner has money habits that conflict with you and your spending or saving style, you may need to spend more time devising financial plans for long-term goals like buying a home or enough money for your children.
When you know what your partner is spending their money on and where they will see themselves a few years later, you can prepare for your future together. If you ask these questions now, you will find fewer surprises as you plan for the future.
This article was first published in ValueChampion.
