Just because an international couple has combined their money does not mean that everything will be okay. This is not to say that it will not work out for them, but as with everything in life, there are going to be a few hiccups along the way. Most of these can be sorted out by talking about the different situations that may arise as they progress through their relationship.
However, being in an international relationship does not have to mean that you are at a disadvantage. It just means that you have a few more conversations to have, which other couples can put off for a while. But in the end, talking through your differences will make your financial decisions a lot easier to make.
Start With What Money Means to Each of You
Early discussions around savings, sharing money, and managing finances can also be greatly beneficial for couples. It is very important to understand each other’s financial habits, how each other was brought up with regard to finances, and any financial expectations that either party may have.
These can affect decisions that the couple makes about how to spend their money and how much to save. The two people in the relationship don’t have to see eye to eye about how to handle finances, but they do need to understand each other’s financial habits and practices.
This can also help reveal how each partner feels about issues like debt, investing in assets, giving loans to family members, and making large purchases before disagreements arise.
Talk About Financial Responsibilities Beyond the Relationship
Supporting relatives can be an obligation that your partner may not have told you about. These can be regular payments of money or goods and services to relatives living in other countries. It’s essential that you both discuss how you will handle these commitments as you build your new life together.
Support of extended family members is an important component of a couple’s overall financial planning, and both partners should be aware of the financial obligations that the other partner has, such as regular payments to parents or siblings. In some cases, partners may even need to agree on how much to send and whether it is better to take it out of their personal funds or from the shared household budget.
Of course, supporting family members abroad can involve more than simply deciding how much to send. International couples may also need to consider transfer fees, exchange rates, and delivery times, so comparing different ways to send money to Mexico can help them choose an option that fits their needs without adding unnecessary costs.
The most important thing to remember is that the partner does have other financial responsibilities outside of the relationship. Thus, both parties should get on the same page and discuss what amount of money they can each afford to spend on each relative and how they would like to split the financial responsibilities of helping out each family member.
Decide How You Will Handle Different Currencies
Currency and savings in different currencies can cause many problems when deciding on expenses, budget, and savings. In many cases, one partner earns money in one currency (most often their local currency), and the other partner’s savings, property, and family expenses are in another currency.
This will make it easier for you both to be able to calculate your expenses and savings in one currency. Be sure to factor in the current exchange rate as well as the typical fluctuations when planning for large purchases, such as a wedding or property, in a foreign country.
Additionally, having a reserve for unforeseen currency fluctuations (i.e., for a wedding, for a down payment on a house, for a trip, or for family expenses) can save a couple from big surprises.
Be Clear About Existing Accounts and Debts
Before combining finances with your other half, it is essential to have an overview of the existing accounts and debts that you bring to the table. All checking accounts, savings accounts, and credit cards, including store cards, as well as outstanding loans, such as a student loan or personal loans, such as a mortgage, and even investments, like shares and bonds, and last but not least property and land that you own, will have to be checked and should be declared to your other half.
It is also worth remembering that partners will also have accounts held in their home country. These do not have to be closed and can be left to be used as and when required.
This is true regardless of where the partners are located around the world. Full transparency about financial responsibilities is always better than a rushed attempt to simplify the matter. The couple can then go on to decide whether to keep certain accounts separate, to combine them, or whether they are no longer necessary.
Agree on What “Shared” Actually Means
Stating that “Combining finances does not have to mean putting every dollar into one account” is already stating that in some cases, it might even be better not to combine finances. Therefore, it is better to discuss in what way finances could be combined.
A hybrid financial system is the best solution for many couples, especially for those who have family members in different countries and who already have financial responsibilities to attend to. For instance, each individual can keep their own personal accounts to use for whatever they like, while they also contribute to a number of joint accounts for purposes such as paying for the house, paying for travel, and saving for things like retirement, etc.
Ultimately, it is up to the two individuals to work out a financial system that is fair to both parties. Even if it seems simple on the surface, it can have a host of complex issues that could potentially affect both individuals negatively.
Make Long-Term Plans Across Borders
Discuss future living arrangements. The couple should also talk about where they expect to live in the future. This could affect the type of account the couple opens for saving for retirement and property they may want to buy.
Some of the biggest questions facing international couples include what country they might live in in the future and what the couple’s different citizenships will mean. Also, what kind of support will each partner’s aging parents need in the future? Where will they live? The couple’s different family connections and obligations could shape their plans for the future. Even if the couple doesn’t have any clear plans for the future, talking about them can help them make smarter financial decisions in the here and now.
This also applies to larger goals that a couple may have. They should discuss where they expect to be in a few years’ time and how this will affect their financial situation. This can also affect where they plan to retire.
Keep the Conversation Going
Financial discussions don’t have to end the moment you get married. Because of the financial realities of life across borders, even the smallest changes in your family or finances can have big effects. Therefore, it is wise to regularly review your joint financial situation.
By having short financial check-ins every few months, the couple can monitor each other’s spending, their savings, and any family commitments and be aware of upcoming goals and events.
In the end, international couples need to set up a financial system that is perfect for the two of them. For them, this means being completely open about the financial aspects of life across borders and creating a plan that works for both of them.
Written by: Antoine Fischer
