People often say that money has the power to make or break relationships, as it is seen as one of the biggest causes of conflict in relationships – which is why we must address it before marriage. According to research from Utah State University, married couples who had financial disagreement with their spouses once a week were twice as likely to get divorced. If you’re planning on getting married, you should have a serious talk with your partner on getting your financial values in sync with each other. Marriage is a time to celebrate love, so money shouldn’t get in the way of your happiness. Here are 4 simple tips from MoneyHero.com.hk for all engaged couples!
1. You’ve gotta get on the same page about your finances
A lot of couples avoid talking about money and financial issues with their partner due to fear of disagreement or potential argument. However, if you keep on burying these issues under the rug, they’ll eventually blow up in your face and seriously affect your relationship. Instead, you should have an open sharing session about your financial values and spending habits in a calm and sensible manner. The discussion should include factors such as income review, credit and debt circumstances. After all, a healthy discussion can help identify problems early on and establish a sense of trust and security between the two of you.
2. Pay off your debts as soon as possible
Starting married life with debt will put an enormous strain on your finances and your relationship. Even if you attempt to hide it, this will only create growing frustration and resentment between you and your partner. Especially in an expensive city like Hong Kong, couples often have to combine forces to apply for a mortgage together. Therefore, there is a crucial need to get all your cards on the table before tying the knot. Another factor to consider is that if a couple has a low credit score rating, lenders might reject a couple’s application or charge a higher interest rate. This is why you should pay off all debts as soon as possible (such as student loans and credit cards) in order to improve your credit score. All in all, a solid credit rating will help you obtain a much more favourable interest rate for a mortgage or personal loan.
3. Don’t forget about long term financial goals
Other than setting up short term goals like travelling, or saving up for that new television you’ve been dreaming of, one should never forget about long-term financial goals. For example, starting an education fund for your children early on will be beneficial for your family in the long run. Have a serious talk with your partner about your financial responsibilities. such as paying the monthly instalments of your mortgage, utility bills and other regular subscriptions. Having a joint bank account can make managing household bills much simpler, since you only need to deposit a certain amount of money into the account every month. On the other hand, keeping separate personal accounts is also a smart idea and a way to maintain financial autonomy.
4. Buy insurance for your family
You should always prepare for the worst, so make sure you and your loved ones are insured. Critical diseases don’t just occur among old people nowadays – they are becoming more and more common among young adults in Hong Kong and medical expenses are on the rise. Investing in health insurance or critical illness insurance early on can ensure that you and your family will be financially secure for the worst case scenario e.g. if you become too ill to go to work. If you are the sole breadwinner of your family, life insurance will provide the financial protection your family needs during a sudden and unexpected death.
Who doesn’t want to get married and live happily ever after? To make sure you’re headed in the right direction, we recommend you follow these tips and get your finances sorted together as a couple. After all, marriage is all about honesty, open communication, trust and respect!