FIRE, budgets and relationships

Without turning this blog into a personal drama diary, after starting reading about FIRE, practicing the core ideas, and writing here, I had to try this from the relationship angle. Thinking about my personal experience, there are 3 levels of a relationship, from a finance angle:
  • The beginning No financial aspect is shared. Depending on culture, expenses may rise during this stage (dates, cinema, etc). For me, this stage lasts a few months at most.
  • Things are getting serious This is where the couple is travelling together, may use a single car together, and to some extent, the common costs have to be budgeted. This is where the cracks show up when there are either income or cultural differences. On a brighter side, this is where you can discuss “Hey, when your rental contract is up, let’s move in together“.
  • Financially married You may or may not use a single joint bank account, but living together, doing most things together, and having a common budget falls in here. Pragmatism plays a big role here in order to have a healthy relationship.
Now, my experience at each of the 3 stages: The beginning This is where I absorb most of the cost, and historically I’ve made some terrible mistakes. This is the stage where I’m trying to pay attention to the spending patterns, to spot any differences. This is also where I take an educated guess on someone’s income level, in order to estimate what common plans are possible, and what expenses I’d need to absorb. My most common mistake: trying to impress someone by spending more than I should Something I’d do differently: I’d talk early, in an open manner, about my interest in investing and FIRE. If the other person is interested, that’s a good sign. If not, or there’s a strong disagreement, I’ll take that as a serious negative sign. The “things are getting serious” stage Being recently out of such a relationship, I have a fresh recollection of every issue I’ve noticed. This is where my weekend-city-break hobby creates problems when the SO’s income is half. This is where I’m trying to argue that buying a car in a big city like London is not a good idea, especially while sharing a small flat with 3 other people. This is where I realize that I’ll have to pay for most holidays, if I’d like to have a happy relationship (hint: it didn’t work). This is where I will get criticized that I should live my life while I’m young (#yolo) and not care about saving money. This is where I realize that there is a cost associated to a relationship (car co-payments, car insurance, parking, gas, travelling). My most common mistake: Ignoring fundamental differences, and accepting a change in my spending & lifestyle, due to emotional decisions. Something I’d do differently: I’m not at the level where I can, nor do I want to support someone financially. As arrogant as it sounds, given my lifestyle, I’ll probably have to focus on people with a similar professional trajectory, and income as me. The “Financially married” I can only speak from a limited experience, as I’ve only been at this stage once. I have to admit, it wasn’t bad. Living together is cheaper, sharing utility & groceries bills definitely helps, and travelling together when splitting the tab is real fun! If you have made it to this stage of the relationship, chances are you will be able to solve most cultural differences when it comes to spending. The most sensitive topic at this stage is any asset-splitting, in case the relationship ends. As long as anything has been bought together, you can be sure there will be some argument over who takes what. Can’t add a “most common mistake”, due to the limited statistical sample 🙂 . Something I’d do differently: I’d follow Dave Ramsey’s advice on couple’s budgets, and allow for a large “discretionary spending” category, for the otherwise compulsory shoes, bags, and WiFi light bulbs. I’d set up the budget in an open way, at least at a “spending category” level. Perhaps transaction-level when married.   That’s everything I had in mind, at a high level. I may add a 2nd post on relationships & money, once I have some structure in my thoughts. I hope this helps anyone that is not sure how to approach this topic with their SO when building a relationship.

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