Finance in Partnership | Economy

Is my money your money too? Who owns our money? You hear over and over again: A partnership is based on love, not an economic issue. However, financial disagreements can quickly lead to emotional conflicts – from simple events like who pays at the bar to discussions about who will pay for the next installment of the house. With record inflation rising, life has recently become significantly more expensive. Against this background, financial expert Eva Maria Wedel of the Austrian Association of Financial Planners explains how couples can better organize their finances so that money does not become a relationship killer.

Do you share everything with your partner? The reality is different, because according to a recent study, financial matters are not always openly discussed in relationships. Only about two-thirds of Austrians know how much their partners earn. And only about one in two (55 percent) told them about their salary. Money and love is a difficult subject. It’s rarely about pure amounts, but it’s about so much more: what you and your business deserve. It’s about independence, security, and provisioning. If you want to buy a new car, your partner prefers to travel far. You think long term, your partner lives in the here and now. Planning a future together can be difficult if you have different ideas. What helps? says Eva Maria Wedel, Honorary Board Member of the Society of Financial Planners and full-time President of Family Wealth at Bankhaus Carl Spängler.

Shared bed, separate accounts

According to Liddell, the question of who contributes to cofinancing and who pays the expenses is often the first point in a discussion with the potential for conflict. So she recommends keeping three accounts – one for each partner to which their respective salaries go, and a joint account in which they are denied expenses for rent, children, or joint vacations. Transparency is one of the main arguments for a joint account. In the event of a separation, it is possible to quickly determine who has contributed what over the years. “Many people mistakenly assume that everyone owns half. But who pays how much. If the account is overdrawn, both parties are liable for the total debt,” Weidl says. The joint account is also paid in the event of death, since the remaining dependent on Alive has full access. On the other hand, individual accounts are blocked until the estate is settled. Incidentally, there are no legal requirements such as marriage or partnership registered for a joint account.

Loans: What is the distance for two people?

Another “financial issue” is loans, especially real estate. One of the advantages of a joint mortgage loan is that two incomes increase the credit rating, and this, in turn, has a positive effect on conditions. In addition, the loan can be higher because the available household income is included in the calculation of the loan amount. However, each partner must be responsible for the obligations of the other and be liable for the entire amount of the loan. For the bank, it does not matter who actually has to pay the installments, to what extent and who is registered in the land registry as the owner of the property. “This is why it is so important not to overwork yourself and not to underestimate the costs of daily living and unpleasant events, such as not being able to work due to illness or injuries,” advises Weidl. According to the criteria for granting new mortgages, which took effect in July, 20 percent of the purchase price (including additional costs) must be presented in the form of equity.

Saving protects from poverty trap

In the event of separation or unexpected death, prevention is especially important. For people who have worked less because of raising children, a rude awakening often follows when they reach retirement age. “In a healthy relationship, both contribute to the financial independence of the partner involved. The pension split provides very good protection, which is hardly known and used too little,” the financial advisor reveals. For example, if the man works and the woman is responsible for childcare, the woman receives a partial retirement credit from the partner’s pension benefit from the calendar year of birth until the child is seven years old, increasing her pension entitlement. The application must be submitted before the youngest child reaches the age of ten. Finally, the expert recommends relying on qualified advice for all financial projects as a couple – not only to avoid any mistakes, but also to take into account individual life situations as best as possible. Because in the current challenging economic environment, financial planning is more important than ever, whether alone or in a community.

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