1. Plan for the next three years, then plan some more
Most arguments in relationships are about the unknown and it’s amazing to see how much misunderstanding and uncertainty can be avoided by talking about, and talking through, our money matters.
Many people can't actually remember discussing money matters before they partnered up - *gasp* and are more comfortable talking about sexual histories than credit histories.
- Why not try and write some of your three-year goals down and put them on the fridge?
2. Talk about what's important to you financially and why
Are you wanting to travel? Buy a home? Perhaps remodel your current one? When it comes to money matters, everything is a trade-off, balancing one expectation to forgo another.
- Did you know new cars can lose 12% of their value when you drive them out of the car yard? So is a pre-loved car a better idea when you can spend the savings on your trip to Spain?
Making good decisions usually starts with understanding and agreeing on what's important to you and want’s ... well, not so much.
3. Think about (then talk about) how you want to manage your money matters as a couple - split expenses or combine your financial life?
For many LGBT couples, dual-incomes increase our resources and our responsibilities. So spend some time agreeing on how you manage your expenses as a couple.
- Do you split expenses 50\50?
- If one of your incomes is markedly higher than the other, do you split expenses as a percentage or portion of your incomes?
There’s definitely no right or wrong answer here as long as you’ve decided as a couple what works for you both.
If you’d like to learn about the dark arts of proportional budgeting and how to split expenses according to your income levels, check out our blog and infographic Budget-Like-A-Badass, here.
4. Don't forget to leave room (and budget) for some fun
The reasons why we work is to live, love and enjoy; so don't get stuck on becoming all sensible shoes and kill the fun of living and loving a fabulous life.
- Find that sweet spot, for you.
Sure, if you find practising financial minimalism particularly alluring, knock your socks off!
But if you’re more like the rest of us, know your priorities, spend a little, and invest in (and spoil) the relationships and experiences that bring you joy.
5. Expect the unexpected - life happens
The best backup plan starts with an emergency savings fund. Now whether that's hiding in your mortgage offset account, stashed away in an unlinked bank account (that's kinda hard to get easy access to), we all need a backup plan.
- Learn about transferring important risks to an insurance company; - we do it in small ways we insure our car, our phones, even our pooch; but did you know that you can insure your ability to earn an income? The statists are 1 in 4 people will be forced to take at least 3 months off sick or injured over their working life.
- Nobody expects to be laid off work, get sick or develop an age related illness (or break a leg falling off a parade float - just saying). The next best thing is an income protection policy and crisis recovery insurance to help get you back on your financial feet and living life.
- Having an emergency fund and being prepared will reduce the chance you have to cancel the fun part of your savings plans and reduce the financial stress on your relationships.
6. Always protect what (and who) you cannot afford to lose
If you’re like most LGBTI people, the engine that makes the fabulous happen is probably your ability to earn your income.
- Deciding what's a priority for you will help you prioritise who and what you need to insure and protect.
- Whether your single and self-reliant, whether you’re partnered and doubling your fun or whether your parenting - in all its beautiful diversity - the key to that success is getting your financial life in better shape.
Money matters are the #1 thing people fight over and not knowing what your options are (or could be) often needlessly fuels the fires of mistakes and misunderstanding.
Where to from here?
Simply said, we all have blind spots in our financial lives so that's the reason to connect with a specialty financial adviser through Unusual Risks today.
Until then, here are 4 key things to do today.
- Learn how to insure your income (and whether you can have your super fund pay for that).
- Agree if you have debts, protect your partner from them (in case you’re no longer there to do that).
- Check your super and life insurance nominated beneficiaries are up to date.
- Subscribe to a regular (Australian) financial blog. (The American ones don't talk about super and have different tax laws for the family home etc.) Our parent brand, Sapience Financial's Not-a-Newsletter monthly is great (and yes we’re proudly biased - so go subscribe now).
And if it all sounds a little too intense, let us help you out with all of that.
Remember a guilt ladened binge of DIY financial reading after a late-night Google search is never the same as speaking with a professional who does this type of thing all day, every day, every year for fabulous people.