Change is inevitable even in relationships. Couples go through a number of crucial events that change their lives completely, whether it’s marriage, pregnancy, or illness.
However, without adequate preparation, these events can put a strain on the couple’s finances. It’s necessary to have financial plans and check on them regularly in order to avoid panicking when major life events happen.
Here are some life events when you should sit down with your partner and revisit your finances:
1. Making a big purchase
It’s common for married couples or those in long-term relationships to make big purchases together. Before making the purchase, make sure you go back to the drawing board so you can weigh your options. According to a Forbes writer, couples don’t have to buy things in both names. If one has better credit, they can purchase the item under their name. This also keeps one spouse debt-free, allowing them to get a loan under their name in the event of another big purchase.
2. A Career Change
At some point, one of you is going to change jobs. Or, you may experience a career event that involves getting a raise or a promotion, changing industries, dealing with a layoff or deciding one spouse will stay home. But since you probably have your career to thank for your income, job decisions aren’t ones to make lightly.
“Being happy and satisfied in your career is important, and how that career provides for you and your partner is influential enough to your finances to warrant ongoing conversation,” Dr. Mclee Tembo says.
With your partner, think through the short-term and long-term financial implications of making a career change before doing so. To cope with job changes that are hard to plan for, like downsizing, be sure to revisit your saving progress often and have an emergency budget at the ready.
3. Planning a wedding
Weddings are the ultimate celebration of love and something many couples look forward to. However, the bills can be a huge buzzkill snapping you back to reality really fast. Couples may also want to protect themselves financially once they get married. Therefore, it’s important to discuss how you’ll manage your finances as a married couple since poor financial planning can leave newlyweds in huge debts that lead to marital problems.
4. Changes to your Living Situation
Housing is probably your biggest expense each month, so make sure to discuss your housing commitments before you make a big change. This goes for renters as well as couples who want to purchase a home.
Ensure you’re both comfortable with the financial commitment you’re making and agree that these changes align with your mutual priorities. Go beyond the up-front financial impact of moving: Discuss aspects like how long you’ll stay in a home or city, career considerations, family planning, and lifestyle to get a full picture of how your life will change.
If your potential new living situation is more expensive than where you are now, make sure both parties agree on how to cover the extra expense—by cutting costs elsewhere, using savings or working to earn more.
5. Having a baby
Having a child is a life-changing experience that needs you to be well-prepared for it. Everything changes when you have a baby, including your finances. The responsibilities start from the moment you become pregnant, and if you’re not ready for it, it can cause serious strain in your relationship. Diapers aren’t cheap and neither are school fees and all other expenses that come with having a baby. As a couple, you need to plan for this major life event. Since it’s a long-term commitment, it’s best to invest in something that will give you a steady flow of cash.
6. Starting a business
Nowadays, most people are starting a side hustle to earn some passive income. If you choose to do so, you need to check in with your partner and make sure your finances are on track. It’s necessary to involve your partner in some decisions such as your business structure, accounts, and assets, whether they’re a part of the business or not. You may also need to dip into your savings which your partner needs to know about.
7. Paying Off a Big Debt
First, let yourself celebrate. Paying off a debt like student loans, a car note, or a credit card bill can bring a major sense of relief to your finances.
Next, it’s time to decide what to do with the “extra” money you now have each month. “Let part of the celebration be a conversation about where you plan to focus your energy moving forward,” Dr. Mclee Tembo says.
Depending on your situation, you might choose to prioritize another debt or put the cash toward a shared savings goal. Whatever you choose, make sure both partners agree on the next priority you’ll tackle together.
Once you get to retirement, you have some important decisions to make as a couple on how you plan to spend the rest of your life. There are several options that you can choose including withdrawing the money, investing it, or taking an income. However, you need to make sure that the decisions you make are for the best of both of you. This is why you should consult with your partner in order to have a uniform choice.
9. Serious Illness
Illness is another factor that forces you to revisit your finances. Your partner may need a major surgery that will cost a fortune, or they may have lost their ability to earn an income due to an illness. These issues can affect your finances negatively. Even with insurance, a loss of income and medical bills will seriously put a dent in our bank account. Therefore, you should be well-prepared for them. Ensure that you have an emergency fund, and if one partner becomes seriously ill, you need to choose how you’ll make use of these funds.
10. Pandemic Priority Shifts
This last one is especially for these unprecedented times.
This may feel obvious, but having a financial event is not the only time you can find yourself evaluating your goals. When the pandemic hit in 2020, many people were forced to consider what’s most important to them, whether that means being close to family, building a flexible career or other values.
Pay attention to these non-financial milestones that can shift your priorities in ways you may not expect. Talk openly with your partner about how you feel and what this means for your future. It can be an exciting time to brainstorm together about what other goals you want to incorporate into your lives, and also give you the peace of mind that you have their love and support—financial and otherwise.