For most couples, planning a wedding and buying a home together are the first two major decisions made as one. And while most men are happy to let their future wife take the reins when it comes to party planning, buying a house is something altogether different.
The process of searching for a home – and then paying for it – is stressful. Young or new couples may learn a lot about each other throughout this months-long endeavor. One of the biggest issues that must be faced head on is the matter of money, which is, according to CNBC, one of the leading causes of relationship stress. A home is likely the largest purchase that a family will ever make and unless both parties are clear on their wants, desires and limitations, it’s a purchase that can put woes in the wedding bells.
Here are a few tips that will help you and your spouse get through this major milestone with your marriage intact.
Be realistic when it comes to how much you can afford.
Depending on where you live, the average home price can be anywhere from $150,000 to $500,000 or more. Chances are, your dream home falls on the high side of your local market. But, not all incomes will allow for the perfect home, and you must be realistic when you discuss how much you can afford. This calculator from Angie’s List can give you the true cost of your home by calculating what you can expect to pay monthly toward property taxes, electricity, homeowner’s insurance, and much more.
Have an honest conversation about current and future income.
If both you and your partner are currently employed, it’s easy to forget that that situation may change. If you’re planning on having kids and one spouse becoming a stay-at-home parent, your income could be cut in half, leaving the working parent responsible for the house payment. This is a stressful situation and one that has the potential to trigger anger toward the non-employed spouse and fear of losing the family’s primary means of income.
Determine how you will make your down payment.
Most home loans require a 3 percent to 20 percent down payment. On a $200,000 home, this could easily be $40,000, plus closing costs and other associated expenses. Once you decide to buy a home, determine how you will come up with the money to make the down payment. This could mean sacrificing together time in favor of part-time income opportunities or having to cut expenses, such as travel. These things can put strain on a relationship. The Motley Fool explains you may also borrow from retirement funds, but that can have financial ramifications down the road.
Set a budget and stick to it.
Money is not an unlimited resource. For this reason, it becomes necessary, especially when you’re buying your first home together, to set a budget and not deviate from it. Start by discussing and writing down your short and long-term financial goals and allowing a certain amount of finances to go toward monthly budget categories including food, entertainment and saving for your new home. Together, determine how much leeway each other has when making purchases from certain categories. For instance, if your monthly entertainment budget is $150, agree that you must discuss and agree upon pertinent purchases of more than $25.
Don’t look at homes outside of your price range.
Home envy. It’s a real thing and it can be really damaging to a relationship, especially if you’re a couple just starting out with little in the way of financial means. Avoid the temptation to look at homes outside of your price range. If you can’t afford it, there’s no reason to see how the proverbial Joneses live. Longing for something you can’t have may cause resentment and guilt from one or both parties.
By setting boundaries and having an open and honest conversation about money, you and your spouse – or future spouse – will both be on the same page and there will be no surprises when it’s time to begin house hunting. Don’t let money dictate your happiness, get ahead of temptation and learn to respect your financial situation.
Guest post written by Natalie Jones.