Being young and in love is pretty much the closest we’ll ever come to feeling bulletproof. There’s an undeniable confidence that rises to the surface when you’ve got age on your side and a heart bursting with emotion. Colours seem brighter, food tastes better and risk is relegated to the back of your mind as you carry on with reckless abandon. Live in the moment, right? Wrong. Eventually the pitfalls will catch up with you and suddenly you’re partnered up but penniless. Rather than forget about your finances completely, a little bit of future proofing can be the perfect foundation for your happily ever after. Read on to find out the most common mistakes young people make – and you can avoid them.
Communication is the key to a good relationship and this extends to all aspects of your life. While you may spend hours deconstructing The Bachelor, if you’re not talking about your budget too then there’s a real issue. Young couples often assume that “everything will work out” but don’t leave it to chance. Commit to a regular money date to talk finances – bills, insurance, savings. It’ll guarantee that you’re on the same page. It’ll also provide a platform to plan for the future – as it stands only 36% of young Australians own or are paying off homes. A monthly meeting might be your chance to get into the market!
While “love” may be your favourite four letter word when you’re young, there’s another one you should also think about. Debt. At this stage of your life it’s hard to have a lot of financial foresight. Which makes it easy to spend money you don’t have, regardless of the repercussions. Currently the average Australian owes $4,317 on their credit card. To make matters worse, being young and in love is typically a period when property becomes a priority, but don’t buy what you can’t afford. Australians owe a whopping $1,348 trillion in mortgage debt. Combine that with your credit card and suddenly “I do” turns into “I don’t…have any money!” It’s crucial to live within your means and if need be, engage a financial planner to plot out a realistic budget.
It’s quite feasible that by the time you reach your mid to late twenties you may have had several jobs or careers. This means you’ve got several super accounts. Which means your money is all over the place! Unfortunately, tracking down lost super is never going to be top of the to-do list, but it should be! Currently, Australians aged between 25 and 35 have $1,428 million dollars in lost super. Don’t let it fall by the wayside, instead use a super planner to find your lost super and roll together your accounts. In the long run – we’re talking retirement – it’ll be the best money move you ever make!
Money can be a contentious issue for couples, with research proving that nearly 60% of Aussies believe finances can be a source of tension in a relationship. But it’s important that financial planning doesn’t descend into financial finger pointing. The reality is that sharing the ins and outs of your financial sphere with someone else can be tough. There will always be a dominant earner and both parties will have questionable spending habits that may need to be addressed. If this is the case, rather than resorting to arguments, compile lists of things you can cut back on and then swap. You’d be surprised how honest we can be when we’re not on the defensive.
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