You’ve been together with your partner for some time. You feel that it’s time to take the next step in your relationship- managing shared finances. But you’re not sure if you’re approaching things the right way? Here are some myths you may have heard about on how to manage finances as a couple:
1. Avoid talking about money
For many couples, the topic of finance is a tension trigger. To avoid conflict, some think it is best to avoid money conversations for as long as possible. But you shouldn’t only wait for financial issues to happen before talking about them. Discussing your history, spending habits, expectations and goals with your partner earlier helps set future financial goals and allows you to review your progress along the way. Having regular financial conversations also helps support a healthy relationship.
2. Have joint accounts
Should you or should you not have one with your partner? Having a joint account speaks clearly about how transparent partners are with each other, while having separate ones may seem like there’s no trust between partners or respect for the relationship. However, owning a joint account isn’t a rule to follow and you shouldn’t feel pressured to have one. It’s normal, even healthy, for couples to have separate or joint accounts, or even both.
The intention of setting up an account has to be clear – is a joint one to pay for daily necessities? Meals out together? To split bills equally? And are separate accounts for convenience? Or to maintain that sense of financial independence?
If the reason you’re setting up a certain account is because of fear, know that the issue can’t be solved that way. For instance, if you want a joint account because you’re worried your partner might overspend and it helps you to watch their spending, the perceived control may not necessarily be a solution.
There needs to be trust and honest communication on spending habits. Setting a financial plan could help. Discuss with your partner what works best for both of you and decide by weighing the pros and cons. Having joint or separate accounts works, as long as they work for your financial plan.
3. Having the same financial personality
Everyone manages their finances the way they know how to. It’s not realistic to expect that your partner will manage their finances just like you do. Just like having different personality types, there are also different money personalities. There are the big spenders, savers, shoppers, debtors and investors, with characteristics overlapping in some individuals. Knowing which type you and your partner are and understanding what each other’s money habits are will help sort out differences and put in place specific steps to tackle bad financial habits, if any.
4. The one earning more has a bigger say
There is often the scenario of a power play, where the person earning more will have more say because they provide more financial support to the relationship. However, a relationship isn’t the same as being shareholders in a company. You and your partner form a team to make the relationship work and any concerns should be raised at the table. If there are huge salary gaps, discuss what proportion of your salaries will go into bills and compromise on what will work for each of you. It is also beneficial for both parties to be aware of account payments and details and bills, even if one is paying significantly more than the other. At the end of the day, it’s a team effort.
5. You don’t need to worry about retirement yet
Retirement may seem like a long way to go, but the less time you allow your money to work for itself, the less returns you’ll receive for your golden years. You may have priorities such as paying off debt, saving up for children or a house, but it’s never too early to start planning for your retirement. Think about your goals in retirement and what is a reasonable amount for you to put aside regularly. It’s okay to focus largely on your current finances but having a roadmap for the future with your partner would be an added assurance that your future is being taken care of.
Another way of staying prepared for the future and protecting your finances is to get life insurance. Even if we put much effort into our finances, but in the unfortunate event that you are unable to work for an income or even pass away, it will help your partner stay afloat and be financially supported. Whichever stage of life you’re at, whether you’re getting married or expanding your family, have the added assurance to pursue your life goals. For term life insurance like FWD Term Life Plus, enjoy up to a million-dollar life insurance cover from as low as S$1 a day1, with no medical examination required2. The plan also offers spouse coverage of up to S$250,000 for 1 year3.
This is for general information only and does not constitute financial advice. This is not a contract of insurance. You are advised to read the policy contract for details.
Buying a life insurance policy is a long-term commitment. You should consider if this policy is suitable for your needs, or you may wish to seek advice from a qualified financial adviser before making a commitment to purchase this policy. Switching from an existing policy to a new one may have potential disadvantages.
This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). This advertisement has not been reviewed by the Monetary Authority of Singapore.
You should consider if this policy is suitable for your needs, or you may wish to seek advice from a qualified financial adviser before making a commitment to purchase this policy. Switching from an existing policy to a new one may have potential disadvantages.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
1 For a 28 year old non-smoking male, with a fixed policy term of 5 years and a sum assured of S$1 million
2 For customers aged 50 and below, you may purchase up to S$1.5 million coverage without medical check-up if you are in the pink of health. For customers above age 50, the allowable limit for purchase without medical check-up is S$500,000 sum assured.
3 In the event of your death or terminal illness, your spouse, aged 55 and below, is eligible for death and terminal illness cover of up to S$250,000 for 1 year.