How to Manage Finances with Multiple Incomes
In some respects, you’d be inclined to think that managing money from multiple income streams would be easier than dealing with a single source of cash. While this may mean that you have money at your disposal, this can also be a complex process that is difficult to manage.
In this post, we’ll look at how couples can effectively manage multiple income streams, while also achieving their goals of buying their first home.
- Understand the Impact of Joint Credit
When buying a family home, it’s understandable that you should want it to be in both names. However, this will require a joint finance application, which means that your spouse’s bad credit score could count against you.
So, while the presence of joint incomes on an application may enable you to secure a higher amount of funding, this means little if you’re ultimately refused credit.
This means that you’ll need to balance the prospect of landing any additional funds with the nature of each applicant’s credit status, in order to make an informed decision that optimises your chances of securing a mortgage.
- Open a Joint Bank Account
We’ve already touched on the fact that some couples may be loath to do this, of course, but it can really simplify the process of applying for personal loans and mortgages online.
Not only this, but by owning a single bank account that pools your financial resources and repays all monthly bills, it’s far easier to combine your existing income streams and manage your capital over a sustained period of time.
If you’re attempting to split a mortgage or loan repayment between you and your partner, for example, you’ll need to select one account for the money to be withdrawn from. Then, you’ll need to ensure that your partner deposits their contribution to the payment in your account ahead of time, either through the form of a direct debit or a cash sum.
This creates unnecessary complications, which can be easily resolved by opening a joint account and pooling finances.
- Distribute Money Fairly
One of the biggest issues with joint accounts and managing multiple income streams revolves around the distribution of funds.
While it may sound easy to split bills down the middle as a couple, for example, this can cause tension in instances where one partner earns less than the other.
This is why communication is key, and couples must work tirelessly to discuss their options while creating a fair and mutually beneficial plan for all parties. This certainly makes it easier to complete mortgage or similar repayments over time, while it also minimises the risk that couples will fall out in the process of managing multiple income streams.
If these tensions already exist, it’s even more important that you thrash them out before committing to a big-ticket purchase such as a house buy. Otherwise, the relationship may be put under considerable and untenable strain, with any associated disagreements concerning money could cause disruption to monthly repayments.