As I wind down my weekend and write this weekend’s article, a quick reminder to readers is that partnership should be safe and beautiful in the grand scheme, despite the reality that life could take you through curve balls. We’ve been speaking about how personal finance could be thought of, within the context of a long term partnership or marriage. Last weekend’s article touched on the types of needs that you could both consider jointly, how to budget for these needs if you decide to make joint goals, and the factors that could hinder your budget when life throws those curve balls.
What happens when your budget is impacted by one or both partner’s habits or an external issue? And how do you both navigate your joint financial plan despite this? Let’s focus on the three issues highlighted last weekend;
1) Income cash-flow: Once a joint financial plan and budget has been set, a good understanding of your income cash flow could help reduce your anxiety about having enough money to meet your main obligations as at when due. For salaried workers, some companies pay monthly salaries and periodic cash benefits such as holiday allowance, leave allowance, and yearly bonus. Entrepreneurs have more flexible cash-flow schedules based on their business activity. Keeping your employment dynamic in mind, you can both actively plan towards your budget and match payments for your needs to the frequency of your income. Still with planning, your cash-flow could be impacted by independent factors such as an economic downturn, a job loss, or decreased earnings. If this happens, your emergency savings/ investments could be helpful.
Read Also: All (other) things being equal…in personal finance (relationships/ marriage)
2) Extra budgetary spending: As individuals in a partnership, you are each likely to value something that may not necessarily be a priority for your partner. To keep your individuality, there is room for treating such expenses. This is where the idea of keeping individual accounts outside of the joint account should be considered. An example of this type of arrangement is a situation where all of your agreed joint costs are spent out of your joint account, and your individual spending done from your personal accounts. Again, your arrangement should be as unique as your joint financial goals and you as a couple.
3) Debt: Debt could affect your joint financial goals in different ways. It could be have been incurred prior to the relationship or be incurred during the partnership. Whichever way, an important approach to debt is transparency and vulnerability. If debt was incurred before the relationship, it’ll be helpful to agree on how you are going to tackle the debt re-payment, either individually or with support from your partner. If debt is incurred in the relationship as a means to your joint financial goal, it is important to consider how it be paid back taking into account the capacity of your joint income cash-flow.
Even when life throws curve balls, it is still possible to navigate a joint financial plan. It is usually better for you both to tackle debt in a financial plan, rather than handling it alone or burying one’s head in the sand. Remember the point of it all…I’m referring to your partnership. It’s a safe place where you can both be vulnerable and count on each other’s strengths. Pulling from the lyrics of one of my favourite R’n’B artistes (Anthony Hamilton’s The Point of it all), ‘No matter what the storm may bring, I’m fine with you. And the point of it all, is I love you. And the reason for it all, is I love you’ – That could be your ‘why’ when jointly navigating through any of the aforementioned issues,…because life happens sometimes.
Toyosi is a Strategy & Corporate Development Professional with over 8 years of experience in the Financial Services industry. She has spent the last 3 years working at a leading investment management firm. She is passionate about sharing personal finance advice to help others build strong wealth habits. Comments and enquiries can be sent to zolawal@gmail.com
