MANILA, Philippines – Making a relationship work is not only about the romance, it also involves compatibility on financial matters.
Financial expert Rose Fausto said from the start of the relationship, partners should already observe each other’s spending habits and how they deal with finances together.
Fausto said these observations should not only be made casually, it should also be done way before the couple is considering marriage.
“You should start checking your financial compatibility prior to marriage,” she told ANC’s “On The Money.”
“It’s just like any other aspect of a relationship, like your religion perhaps, your values, and money should be part of that because every single day of your married life you would be dealing with money,” she added.
Fausto advised couples thinking of marriage to study the new Family Code, which has several items pertaining to money,
She said that after July 1987, married couples are being governed by the Absolute Community Property.
Prior to this, married couples were governed by the Conjugal Partnership of Gains, wherein all of the properties and inheritance you have before marriage are still yours.
Under the Conjugal Partnership, only the fruits or the income derived from the property that would form part of the pool owned by the married couple.
Now, the husband and wife become co-owners of every single property owned by husband and wife prior to the marriage and during the marriage.
However, Fausto noted that there are three exclusions to the absolute community property:
• Donations, which are specific to the recipient unless the donor says that he or she wants it to be part of the community property
• Properties, which are for personal use
• Properties, which are acquired by either spouse from a previous marriage, if he has legitimate heirs
The first step is to be aware that money is an important part of married life, stressed Fausto.
Rose’s husband, investment expert Marvin Fausto, said couples should discuss their finances before marriage because it will determine if they are indeed ready to jump into the married life.
“If both of you are not financially knowledgeable, you have to have an idea of the things you need to be conscious about and the things you need to compromise because when you enter into a union, the individuality disappears,” Fausto said.
“If you’re not ready to let go of your spending habits, let go of the way you buy things left and right, then maybe you’re not ready. But if you are already willing to sacrifice just a little bit of that for the benefit of the marriage, then you will slowly get into the groove, into the idea of getting married,” he added.
The Faustos said that when they got married, they decided to pool their funds that will be used for expenses and investments.
“It makes it simpler because now it’s really a partnership fund,” said Marvin.
Rose, meanwhile, said the couple should fully disclose their financial status to each other.
The Faustos said there are three financial red flags to lookout for:
• He or she doesn’t have any savings.
• When they continue to support third parties like family or siblings.
• When he or she reacts to certain expenditures that you make. If the reaction is different from what you initially thought, that’s a red flag.
Rose also advised that when it comes to delegating tasks on who should manage a certain aspect of your finances, each partner should make use of their respective skills.
“It is best to discuss it so that the other partner is not left clueless…both parties should know where the money is going and where the money is coming from,” she said.