Achieving a shared dream can start with an honest chat about money

If I ask you to name a few things you and your partner find intimate, I’m guessing that sorting out your finances probably isn’t high on your list. That’s why couples’ financial admin is often avoided – most of us would rather be on a date or chilling on the couch together.

But if you’d both like to enjoy a secure financial future, your most valuable assets don’t cost a thing. Time (planning sooner rather than later) and communication (the frequency and openness of your discussions) are more powerful than you might think.

Discussions about money require openness and understanding.

Getting on top of your finances can have huge relationship benefits because conversations about money often reveal individual and shared dreams. It may sound obvious, but you can’t work out where you’re going together if you don’t talk about it.

These discussions require honesty, but when you’re both open and respectful of the other’s point of view, this vulnerability can inspire new feelings of closeness. If you’ve been putting off a conversation about finances, knowing it could strengthen your connection might motivate you to get started. Here’s how to make wise financial decisions, as a couple.

Refine your focus

Simply talking about your values and long-term aspirations helps you to establish priorities and form a clear vision for your future.

This is essential, according to financial adviser Jess Brady. “If you have wishy-washy goals, it’s harder to plan,” she says, but also points out that you have to be realistic.

Many couples can’t do everything in a tight timeframe, so if you’re debating whether to save for a home, take an international trip or have a big wedding, Brady suggests asking each other: “Of these things, which would make you really sad if they never happened?” Once you know what’s most important, you can start planning more effectively.

Consider a shared cashflow

Establishing who should pay for what can be a source of tension in a relationship because even in a dual-income scenario, it’s likely one person will earn more than the other. So, how do you settle on a fair agreement? While this will depend on whether you’re newly dating or established, financial planner Rebecca Pritchard recommends that established couples consider what they can achieve with shared surplus income, rather than fixating on who earns what.

That means establishing how much you earn as a team, what your non-negotiable and discretionary expenses are and what’s left to put towards your shared goals. Pritchard says both people should be able to say: “I’m working as hard as I can with whatever I have to bring to the table, and you’re doing the same. We’re happy and that’s fair.”

Bank smarter

Once you have established shared goals and know exactly how much surplus income you have to put towards each target, you’re better placed to save those funds with confidence.

Brady suggests automating your banking to ensure money is transferred to your goal accounts, just like a direct debit. “Leaving your goal to take what’s left at the end of the pay cycle will mean it will likely starve. It should be paid straight after you get paid, and you should have enough [of a] buffer to not take it out,” she says.

Do you need a joint account to do this? It will depend on your circumstances, but merging your shared costs can be beneficial in terms of transparency, accountability and visibility.

That said, you can maintain an individual account for personal spending. In fact, many experts recommend having at least one account in your own name.

But if your shared expenses are automated, this reduces the mental load for the person who takes the lead on household accounting.

Understand your tax obligations

You don’t have to be married or share significant assets for your relationship to affect your tax. According to accountant Julian Mauro, you’ll need to state how many days you had your ‘spouse’ in a given financial year in your tax return. So if you’ve moved in together recently, this will be a factor in your next tax return.

Having a spouse affects the Medicare levy surcharge that is payable if you don’t have private health insurance, and you earn more than $180,000 as a couple (the family income threshold is increased by $1500 for each dependent child after the first one). “Ideally, for full tax maximisation you’d both want to have the same level of hospital cover once you’re disclosing a spouse in your tax return,” Mauro says.

Split your super?

If you are planning to have children, or are raising a family, chances are the person who has stayed home in the early days has been financially penalised in the form of missed earnings and superannuation. Raising children is a valuable contribution to the household, so the working partner has the option to distribute a portion of their super to the primary carer. It can be done at any time, not just when one person takes parental leave. All you need to do is fill out an ATO form.

Also, ensure your super beneficiary nomination is up-to-date. Family lawyer Laura Vickers says: “If your will says your super should go to your partner but your binding death benefit nomination directs it to your dependent child or your estate, the nomination will prevail.”

Some of these subjects may be difficult to raise, but if you have chosen a committed relationship and want to operate as a team, sharing the responsibility for your lifestyle costs and financial future is just as important as scheduling a regular date night.

Nicole Haddow is the author of Couple Goals (Hachette) out now.

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