Making plans to move in with your partner or share finances can be exciting. Knowing your financial and legal responsibilities, and where to get help if you need it, can make your life together run more smoothly.
Talk about your finances
The earlier you start talking about your finances with your partner, the better.
Understand each other’s general attitude to money, and be clear about your financial goals — both short and long term. Knowing these things can help build a strong foundation for a healthy relationship — with each other and with money.
See where you both stand financially
Chances are you’re both in different financial situations, with different incomes, assets and debts. To understand where you’re both at financially, make a list of your combined:
- income
- regular expenses
- assets, including your house and car
- super and investments
- debts and loans
Decide on your goals
Agree on your financial — and relationship — goals. Be clear about what you want and when, so you can work together to get there.
If you plan to get married, buy a house or have children, think about how you can save.
You might need to agree to cut back on expenses and reduce your debts before you can start saving.
Moving in together
Deciding to live together is a serious step. It might not sound romantic, but being clear about finances can save hassles later on.
If this is the first time you’ve lived independently, learn about the costs that come with moving out of home.
Do a budget
Before you find a place to live, do a budget together. This will give you a clear picture of your combined income and regular expenses. It’s also a great way to help you reach your shared savings goals.
Sort out who pays for what
Talk about how you’ll split expenses and who’s responsible for paying bills, rent and other regular payments.
If you both sign the lease for a rental property, then you’re both responsible for the rent. Also decide if want to add both your names to utility services like electricity, gas, water and the internet.
Sharing money and debt
Before you share a bank account or get a credit card with your partner, make sure you know the risks and responsibilities. Don’t rush into it or sign anything you’re unsure about.
Joint bank account
Opening a joint bank account can make it easier to pay for shared expenses. It also means you both know how much money you have. But there are risks.
Shared credit card
Having a joint credit card means the card is in both your names, so you’re both responsible for making repayments.
You need to trust each other to not overspend. If you can’t keep up with card repayments, it will affect both of your credit scores. You both have to agree if you want to cancel the card.
Another option is to have primary and secondary credit cards. One person is the main cardholder, and the other is a secondary holder with their own card. The primary cardholder is solely responsible for any debt on the card. They can cancel it without the other person’s permission.
Shared loans
If you need to borrow money, think carefully about getting a loan in both your names. Understand that when you do:
- You are also both responsible for repaying the debt.
- You both own the portion that’s been paid off.
Be extremely cautious about putting your name or going guarantor on a loan that is solely for your partner. For example, a loan for their business. If things go wrong, you risk having to pay it all back.
Financial agreement or prenup
If you have assets you want to protect, such as property or super, you can ask your partner to sign a binding financial agreement. This is also known as a prenup.
A financial agreement sets out how your assets and money are divided if your relationship breaks down. It also explains what financial support you or your partner gets.
For the agreement to be binding, you both have to sign it and have sought legal and financial advice before signing.
Planning for your financial future
If you’re serious about sharing your finances, you may want to consider:
- Making or updating your will to add your partner as a beneficiary.
- Updating your insurance policies to reflect your status as a couple, for example, couples health insurance and life insurance.
- Updating your super to change your beneficiary details, and looking at how you can grow your super together
- Checking if being in a relationship (either married or de facto) affects your Centrelink payments or benefits.
- Checking any changes you need to make with your tax return. For example, Medicare levy, offsets and other declarations or entitlements. The Australian Tax Office (ATO) has more information.
Get help if you need it
If you and your partner need help with debt or budgeting, please get in touch.
If money issues are causing problems, then a relationship counsellor may be able to help you. For a list of relationship support services, see:
If you’re uncomfortable with the way your partner controls money, this may be a sign of financial abuse. You can get support.
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Source: ASIC MoneySmart
