Love and money go together like strawberries and cream.
Or do they?
How couples manage money with the one they love can be as varied as there are varieties of fruit.
When you hook up with your life partner, grilling them about how much money they have and debt is not something you step lightly into.
Being honest, it’s often something you will deliberately shy away from.
You don’t want to be seen as being obsessed about money, nor known as a gold digger, only dating people who have got their money sorted.
Yet to be a successful couple, in it for the long term, you absolutely need to be strawberries and cream. If you’re not then trouble could be brewing.
Getting to grips with your own finances and making them work can take some of us a very long time.
Add in another person – your loved one – and their money and you’ve just doubled the complexity.
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How Couples Manage Money, Love And Finances
Loving someone does not automatically mean you are on the same page financially and that can be a real problem.
So the sooner the two of you get talking about how you are going to manage your money, the better.
The best time to be talking about how you will manage money as a couple is probably on your first date.
If you are an extreme saver, it will only end in tears if you date a spendthrift.
But let’s be honest, no-one talks about money on a first date, you’ve got to decide whether you want a 2nd date first!
The second best time for couples to talk about money is today.
Wherever in your relationship today finds you. 6 months into a loving relationship or 6 years into a marriage.
If you’ve not done so before, today is the day to start thinking and talking about how to manage money together.
The Why Of How Couples Manage Money
Why should you be talking about managing your money if you are both independent, working people?
Because you are not identikit people.
You earn differently, you spend differently, you think differently and long term these make a difference.
So you need to talk through some of this money stuff to get an idea of where your partner is at.
Believe me when I say that as time goes on, money and it’s many problems will rear it’s head time and again.
When the SHTF you need to know how you will both handle your finances, how you will jointly make the difficult money decisions that have to be made.
Sharing Finances In Marriage
It doesn’t matter whether you are splitting bills with your boyfriend or have joint bank accounts with your husband and are sharing finances in your marriage 50:50.
You still need to talk money and agree on the important stuff.
How you split your finances when living together or are married is one big topic for discussion.
One size does not fit all, there is no right or wrong answer to this question.
Only what is right for BOTH of you.
Quite often a couple will have different earnings power.
If your husband earns twice what you do is it OK if he only pays 50% of your joint bills?
That’s up to you.
My personal opinion is absolutely not, but I am not you.
What about future life events like children? How will you manage your money as a couple if only one is working?
Working out how to handle your finances when you move in together and you are both in steady jobs is one thing.
It gets more complicated as you take on more commitments such as a mortgage and children.
Getting yourselves on a firm footing now, wherever you are in your relationship will help you manage your money now and in the future.
Many arguments about money are less about money and more about something else.
Resentment about life choices, compromises made or promised and not kept can all rear up in the form of money disputes.
Mr2p and I have had many a heated conversation about money.
I can tell you 90% of the heat comes not from the money discussion but anxieties, resentments and relationships niggles from other things going in our lives.
Which is why I encourage you to NEVER raise the subject of money when you haven’t fully made up from a previous argument.
Although it’s very tempting to do so if you are still spoiling for a fight!
Being on the same page as your partner is the basis for marital harmony.
Be agreed on how you both want your lives to be now and in the future.
If you are on the same page financially as your partner (like strawberries and cream) then you have a solid foundation on which to build an amazing life.
9 Strategies For How Couples Manage Money Successfully
1. Be Honest About Money
That saying: “honesty is the best policy” is fundamental to discussing money with your loved one.
Be open and honest about debts you may have, bad and good spending habits and your family expectations.
For example do you regularly borrow from your parents or vice versa? Do you tithe?
For me, the starting point is to share how much you earn with your partner.
If you would do anything for your partner, why not share this basic information? It’s not a state secret!
If you can’t or won’t share this information, you both need to bottom out why the need for secrecy.
Because it will come back to haunt your relationship in some shape or form.
A friend (who is now getting divorced) did not know how much her husband earned, after more than 10 years of marriage.
Finances were (apparently) not a factor in their relationship breakdown but it would seem secrecy was.
How sad that she felt she had to go rooting through his paperwork to find out his income so she could raise the subject of appropriate child support?
2. Have Joint Financial Goals
If you want to achieve things financially in your life then you need goals. Money is central to many of your life aspirations so having joint goals makes sense. You are aiming to achieve life together.
If you are just starting out in life talk about the big decisions. Buying a home, having kids, travel, expensive hobbies.
Kids in particular come with hidden costs. Cost such as losing one income to enable a SAHP, college costs.
Never assume that your partner must know you want/don’t want certain things like kids, a big house.
DD2’s boyfriend announced early on that he never wanted children – that’s a big decision for someone quite young but he is open about it and they can discuss it now and in the future.
While you’ve got joint financial goals and aspirations you don’t need to have your life completely mapped out.
Just know where your other half stands on certain money subjects.
3. Know All Your Expenses
There are arguments for and against joint bank accounts.
I’m not saying you need to join your money up completely but you do need to know what your expenses are as a couple.
You both need to know exactly how much is getting spent on what.
Track spending, keep receipts for 3 months on everything, even things you paid cash on.
When you both know what is being spent you can make future plans for your money.
You can jointly agree ways to save money that perhaps one of you didn’t know.
4. Create A Money Plan
Your money plan encompasses your financial goals, your spending habits, how you save money, where you save it etc.
Your money plan is your strategy on how you will achieve your financial goals.
Where you will invest your money.
What your priority debts to pay off are.
You will want to talk about how you pay for annual insurances, subscriptions and odd bills as they arise.
The best way to plan for these is to have sinking funds.
As part of your money plan you will want to think about some ground rules the two of you have. For instance:
- The maximum $ either one can spend without discussion (many couples have a $100 limit)
- How you will spend joint money
- What you do about existing debts
Decide on what method of money spending you will use. Will you use credit cards (and pay off in full each month) or will you start with the cash envelope system?
Using cash is a great way to learn what your money habits are and helps you track your spending.
As part of creating your money plan you can also discuss how to agree to disagree.
You are not always going to be mirror images of each other so you need a plan on how to deal with differences when they happen.
Because they will.
Here’s another apt saying for you: “If you fail to plan, you plan to fail”.
Harsh but true.
5. Agree How Money Is Shared
You need to discuss and agree how you will manage your money on a practical level.
For example what account/s your money will go into and who pays for what?
To joint bank account or not?
If you talk to 10 couples and read 10 articles you will get a very 50:50 split on the subject of joint accounts.
Personally we have always had joint account.
After paying our bills we literally didn’t have anything left between us so having a joint account made sense for us.
If I had £50 more in my account after paying my share of the bills I would have felt guilty because Mr2p didn’t.
Consider how you feel about how much you earn. What if one earns more than the other, does this matter?
Should they keep more of their money to themselves?
No right answers but you do need to discuss.
Factor in thoughts on if kids come along and you agree as a couple to go down to one income, how does the SAHP access money easily?
Many friends have a system of their own account plus a joint bills account which each partner puts money into according to how much they earn.
Some split their bills according to their % share of how much they earn.
For example: If one person earns 70% of their combined income then that person pays for 70% of the bills.
Others agree a $ amount that each will pay. Again it could be different according to how much you earn.
When having these discussions you will want to talk about the money left over after paying bills.
Would it be fair for one person to only have $50 a month left after paying their share of the bills while the other has $500?
As a couple you are making a commitment to each other.
Leaving one person basically poor while the other has plenty to spend does not feel like commitment to me.
But that is me, you’ve got to work this one out between you.
6. Have Weekly Discussions
Sitting down weekly to discuss money, what’s been spent, what bills need paying is essential in the early days.
It gets you on the same page and understanding how you can manage your money successfully as a couple.
Weekly discussions make for shorter conversations.
From experience I can tell you the longer your conversation about money is, the more likely it is for something to go wrong.
Keep your discussions focused on your money plan, what has been spent, what needs to be spent and lessons learned from the previous week.
7. Have Guilt Free Money
No matter how hard times might be, make sure you agree on and allocate a little personal spending money.
When Mr2p and I were living on one income we still had a little personal money that was ours to spend as we wished.
Depending on your finances your personal cash could be $20 a month or it could be $200.
The important thing is to agree an amount between the two of you and agree that it is yours to spend on whatever you like.
No guilt tripping your spouse on what they spent this money on.
Having fun money stops the feelings of resentment building up during the hard times.
It also helps level the playing field when one person might have more expensive tastes than the other.
8. Share The Control Of Money
Very often you will find that one person within a relationship assumes management of the joint finances.
Now this is often about playing to peoples strengths.
I am the Chief Finance Officer in our marriage because I like numbers, I like the detail that is required.
Looking casually in you could be forgiven for thinking that I control our money.
But I don’t. I manage our money.
We share control, I just make our decisions happen.
I do the detail on getting the best deal on our utilities bills, the best interest rate on our savings.
Mr2p assumes management of other aspects of our joint lives.
Equally important and areas that I would be pretty darn hopeless at.
With your finances always ensure that the person who is not managing the finances still has access to and shared control of online accounts.
They must never have to ask you for permission or passwords to view their own/shared money.
9. Prepare For The Worst
How couples manage money in life is one area you need to become expert in. How you manage money in death is another.
Whether you are married or not, as a couple you have made a commitment to each other.
In sickness and in health, and also death.
And death is something you won’t want to think about but you really should.
Accidents happen. Serious illness happen.
You cannot predict whether they will happen to you or not.
Your lives are entwined so you need to ensure things go smoothly should the absolute worst happen.
Discussing your own death isn’t my idea of fun but doing so allows the two of you to make plans. Who gets the house, the dog, the kids?
Some of this might be hypothetical.
Plan for the worst, hope for the best.
Write your legal wills, let family know your intentions and then get busy living.
How Couples Manage Money – Differently
It doesn’t matter whether you’ve been with your partner 5 minutes, months or years when it comes to talking about sharing finances in marriage or a committed relationship.
Today is the best day to start talking, and probably again tomorrow.
Rome wasn’t built in a day so don’t put off a money chat any longer.
There are no right or wrong answers when it comes to how couples manage money.
The key thing is that you and your partner manage your finances right, for you.
For more advice on how couples manage money and on managing your finances please check out these posts: