Whether you’re just starting a relationship, getting more serious or have been together for years, it’s good to think intentionally about how you want to manage your money as a couple.
Money is often cited as being a common reason for relationship conflict. However, conflict relating to money only seems to surface once a relationship is established. Most of us don’t ask the hard questions about money early on in a relationship, so may end up being romantically involved with someone who has a different money philosophy to us.
As with any aspect of a relationship, communication around money is key. That communication should start early on in a relationship and continue throughout your lives together (hopefully!).
If you know me, it’s not going to surprise you when I say that there is not just one way to manage your money as a couple. So, instead of giving you a step by step approach, I am going to give you some discussion points and a few examples to help you and your partner work out what is best for you both.
What are your relationships with money like?
All of us are different, with unique family histories and life experiences. The likelihood is that you’re both going to have your own complex relationships with money, which affect the beliefs you hold about money. It can determine how important money is to you and how comfortable you are with earning, saving or spending it.
While having different relationships with money can be a source of conflict, it can also be a great opportunity for growth. If one person is a Spender, being with a saver can loosen the other up a little, help them enjoy life more and take risks that they wouldn’t otherwise. Equally beneficial is where a saver can encourage a spender to be more financially responsible.
The most important thing here is having awareness about your own and your partner’s relationship with money. Be open and honest about how you feel about money and ask questions of the other person. You may even want to download my free worksheet, 20 Questions to Improve Your Relationship with Money, for a few ideas for what to ask.
What are you bringing to the relationship?
Whether you decide to combine finances or not, it’s important to consider what both you and your partner are bringing to the relationship, fiscally speaking.
If either of you has received an inheritance, for example, that you want to keep separate from your combined finances, you are completely entitled to do so. Equally, if either of you has debt, it may not seem fair to have the other person repay that or feel obligated to repay the debt that they haven’t incurred.
This is where open and honest communication is really important. Everyone has a different idea of what is fair and what they are willing to contribute or share. If you need to speak to a lawyer about a prenuptial agreement, then you have every right to explore this option.
It’s important to be clear about what you both consider to be fair. Whether you are combining all of your finances or just agreeing upon what expenses will be shared, it’s best to have those conversations early. If you disagree, be prepared to negotiate or compromise. Never capitulate on something that is important to you or make any decisions if you feel manipulated or coerced.
How much independence do you want?
There can be efficiencies and conveniences in combining finances. But in doing so you give up some autonomy. If you’re someone who likes to have complete freedom, without having to discuss, explain or justify your spending to someone else, then you may want to consider keeping your money separate.
If you still want to combine finances but also maintain some independence, you might consider at least having separate “pocket money” accounts, where you can transfer a regular agreed amount for discretionary spending.
If you have shared assets, but still want the freedom of separate bank accounts you may decide to keep a smaller joint account and only contribute what’s required for repayments, maintenance, insurance or other fees.
Delegate, don’t abdicate!
Whether you decide to combine all your finances, keep everything separate or decide on something in between, don’t ever completely hand the responsibility of managing your money over to someone else.
Often in relationships, we each excel at different things and so it can be easy to hand over the responsibility of managing money to the person who likes it more or is better at it. But while you might be happy to let one person do the detailed work, it’s important that both parties are aware of where you stand financially, what decisions are being made and what your plans are for your future.
Honesty is the best policy
I can’t tell you how much it shits me seeing those memes about wives hiding their purchases from their husbands. Not only is it a ridiculous stereotype of the shopaholic woman, but it also condones lying about your finances.
If your relationship is going to thrive, then you have to be on the same page financially. Be honest from the outset. Disclose your assets and liabilities and discuss what you want for your future. There is nothing that creates connection more than having an aligned vision for your future and feeling like you’re on the same team.