Can you believe it’s already almost fall? Pumpkin Spice season is fast approaching! Even though the temperatures are getting cooler, work won’t slow down for me. Fall is every bit as busy as summer in real estate, which means I’ll be driving all over the GTA and beyond helping people find their dream homes. At least I’ll have some pretty colours to look at! Now, let’s discuss something I see a lot of in my professional life: couples finances!
This week’s topic is something that is a little uncomfortable to talk about, but it’s something that I see more often than you’d think. Couples who simply aren’t ready to take a huge leap like home ownership together. Of those who fit the bill are people who aren’t practicing strong ‘couples finances’.
The Timeliness of Discussing Couples Finances
Bluntly put, I’ve seen couples in the past who have bought homes who just really weren’t ready for the enormous responsibility, and the intense strain that responsibility can take on a relationship. And that’s in the best of times! That’s not even factoring in the impact COVID-19 has had on both pregnancies as well as divorces, both of which have gone up significantly in 2020.
A lot of couples have been put to the test this year, and the results have been mixed, but profound. Regardless, lots of couples have been either made or broken this past year, and many will be looking to take the next step.
For many, this means buying a home together. And, if you’re thinking of doing this in the GTA, you need to be aware of how tough it will be on you. Like this young couple is learning.
The Not-So Secret Secret
When it comes to my client couples who end up faring the best, there really isn’t any secret. The most successful ones have great communication, and have very carefully and clearly communicated and understood financial boundaries. In fact, the ones who were less insistent on 50/50 arrangements with finance regularly end up the most satisfied at the end of the buying process.
I think the reason for this is preparation. The nature of the financial arrangement between a couple is a tricky one that can often make or break a relationship. It’s a discussion that two people simply have to have to ensure everyone is on the same page and feeling heard and regarded.
Does it have to be 50/50? No, because that’s not always the fairest arrangement for both parties. The odds of meeting and building a relationship with someone who makes exactly the same amount of money as you are simply not in your favour. You’re two different people, with two different jobs, and two different backgrounds – focus less on equal, and more on equitable.
Couples Finances & ‘The Talk’
My first-time clients who have stuck it out the best are people who lived together first. Who have an established pattern of communication which includes financial matters, and who have a clearly negotiated and observed arrangements running their shared households. The reality is that fewer and fewer households have just one ‘bread-winner’, and that means more of a reliance on teamwork when dealing with money matters.
Part of ‘the talk’ should be your financial compatibility. This doesn’t mean comparative income so much as attitudes and behaviours. Are you a saver, but your partner is a spender? Are you frugal, while your partner enjoys the ‘finer things’? Do you pay bills as soon as they come in, while your partner waits until just before the due date? These questions matter before entering into a co-habitation situation with someone.
They matter even more when entering into a binding legal contract with someone involving hundreds of thousands of dollars and your credit rating.
The Bottom Line
So what is the point of this blog? It’s to say this: if you and your significant other made it through COVID-19 together, you know you’re on solid ground and are likely ready to move to the next step. But if any discussion of finance hasn’t occurred before you start looking for a home to buy together, your foundation isn’t as strong as it could be.
No one type of relationship arrangement predicts long-term success in my experience as a real estate professional. What my buyers who fare the best have in common is clear communication and well-defined boundaries which take the needs and limitations of both parties equally into consideration.
I’m not a counsellor or couples therapist, but I work with people every day. I can only share my opinions based on my past experience. With that in mind, I firmly believe that if you can have a discussion of money with your significant other, you can consider your relationship in good shape! If not, you may want to hold off on any major decisions like buying a house until you can.