Commentary: Before you decide to BTO, have you had the money talk?

WHEN SHOULD COUPLES HAVE THE MONEY TALK

We each know of at least a few friends or acquaintances who have applied for a BTO with their school flame, only to go separate ways after.

Within my closer social circle of 10 school friends alone, this happened to three of them. Why?

Part of this comes down to how the conversations and relationship dynamics shift significantly after a couple has applied for a BTO. Once such a huge financial commitment gets locked in, the couple inevitably have to start discussing their finances and how to manage the household together.

If the couple had not discussed this beforehand, this is often when the cracks in the relationship start to appear.

Most people don’t realise this, but the biggest financial decision one makes in life is not which property to buy, but who they choose to marry.

Make sure your partner is financially compatible with you. That compatibility is not measured based on your salary or savings – these things can change over time as your career develops – but rather, both of your attitudes towards money and how you deal with the differences.

For instance, my husband is a spender who used to live pay check to pay check. I, on the other hand, am a saver. I learned from young the importance of having emergency funds stashed aside for rainy days after witnessing the financial turmoil my family was plunged into after my mother was retrenched during the Asian Financial Crisis.

When my husband and I discussed our opposite attitudes towards money, we recognised the value of each other’s perspective and realised that we could work together to complement each other’s strengths and weaknesses.

I ensure our household spending does not exceed our budget, while he encourages me to spend on things that frees up time for us (for example, outsourcing our household chores).

As a personal finance blogger, it’s in my nature to have these conversations early. But I’ve observed from many friends around me that these topics are difficult, and most couples try to avoid talking about it until they cannot run from it any longer.

While the reduced initial down payment certainly makes it easier for young couples to start their home ownership journey, they need to ensure they are on the same page financially before doing so.

Dawn Cher, also known as SG Budget Babe, runs a popular blog on personal finance and has a licence in real estate.