Money can be a recipe for a beautiful and blissful love or absolute hell when mixed with your love life. While some couples have the financial aspects of their relationships on lockdown, others find it their relationship’s biggest bone of contention.
What causes this disparity? What is the best way to manage love and money? This article offers a few heads-up on how you can conveniently handle finances and keep your love candles burning without one affecting the other.
Communication is key
There are many sides to ‘finances’ in a relationship. From TFSAs, RESPs, RRSPs, non-registered vs. registered, and more, keeping up with all the decisions that determine your current and future financial positions can be challenging. Some households assign one person to handle the family finances to streamline things. While that works fine, inadequate or lack of communication may lead to problems in the long run. In such situations, only one person (the one in charge) has answers to almost all-important questions, such as:
– Income vs. expenditure
– Account types that support beneficiaries
– Withdrawals and tax consequences from all accounts
– Writing and updating wills
We all have so many things to keep up with. But finance is a priority and should be treated as such. Make sure you review your finances regularly with your partner, where you discuss the most important issues that preserve your future.
Always have a plan in place
It is easy to believe you have your finances under control. But money matters are known for their intricacies. This is why you should have an expert in the picture. A financial planner can offer clarity on issues that determine your financial future. Start by identifying your top financial priorities depending on your needs at that stage of your life.
For example, a couple preparing for retirement would have different goals from another couple trying to buy their first car, set up investments, or even pay debts. Each partner should write out their financial goals and pick out those requiring immediate actions and those you can postpone. A planning professional can help you through this process.
Manage risk effectively
Your financial plan needs a foundation, and effective risk management is essential. Understand your financial risks and know where you might be hit. You can spend a lot of time crafting the perfect financial plan, only to eventually find out your partner is battling a critical health condition or even worse.
Such a discovery can render all your plans unusable. That is why you must imagine all these scenarios and have a contingency plan to address them. Again, your financial adviser can offer you a list of financial vehicles that protects you from these risks.
Never stop saving
One way of accumulating wealth is by systematic savings. But it doesn’t come easy; you must be intentional about it. Learn how to save, when to save, and the right places to save in. The following tips can be very helpful:
– When would you need these funds (your savings)?
– Always pay yourself first. Rather than rely on random deposits to save, create a savings plan that helps you achieve your goals.
– Taxes are important. Find the proper account in line with your savings goal.
– Grants, bonds, and special benefits are ways of optimizing your financial goals if you get the right plans. For instance, a RESP offers free money as contribution-matching up to a specific limit, and this can come in handy if you have savings goals like paying school fees for your children. Likewise, you can invest in an RRSP to get $35,000 through the first-time homebuyer’s loan program, which can go into buying a home. Again, there are several options to choose from.
In the end, we cannot separate money from love. However, keeping love and money together doesn’t come easy. We are confident this article has shown how you can protect your love from the strains of money.
Cheers to forever!