I wrote a while ago now about my personal story of a previous relationship where I had given up all control of my own finances. It wasn’t a malicious act on the part of my ex, but it was a result of my own apathy and “blocks” around managing money. Although saying that, he used to tell me that I was rubbish at handling money, so I suppose I also internalised this somewhere and made it true. Money was not the reason why we broke up, but the inequality of it didn’t help.
My previous situation sadly isn’t unique.
According to marriage.com money is the number two cause of divorce.
So I wanted to focus this week on your relationship and how you handle money as a couple. Have you had the conversation with your other half yet, or are you both sweeping it under the rug?
Questions to ask each other
Knowing how you’re going to manage your money together is essential before getting too deep into commitment. Here are some suggested questions to get the conversation flowing. Remember that talking about money can be difficult for some people (it certainly was for me), so take your time, and keep the atmosphere light and relaxed. Money conversations do not need to be stressful!
- How much do you both earn? Maybe one of you earns more? – problems that arise could include one person feeling held back because their partner can’t afford to keep up with everything they want to do. The person who earns less may feel resentful or guilty for not being able to contribute more. How are you going to work around this?
- What are you spending habits? Maybe one of you spends more and this causes anxiety for the other? – problems that could arise include hiding purchases, lying about credit card bills or arguments due to overspending.
- Do you both know your credit scores? When you start opening joint accounts with each other, it could affect your credit scores. Is one of you in significant debt and has a low score for example?
- How do you see your future together? Children? Mortgage? Running off into the sunset travelling? If you have very different ideals, then either come to a compromise, or seriously consider if this relationship is right for you both.
- How do you plan on managing your finances together? – if you learnt anything from my story, it was that having all the money with one person is not necessarily a healthy way of managing money together.
How can you manage your finances?
Starting to share finances takes a lot of trust. A member of my family was badly burnt when a partner ran off with all their joint savings after getting married and opening a bank account together. This is an extreme example and won’t (hopefully) be an issue for most people, but it got me thinking!
So these are a few ideas of how you could manage your money together after observing how some couples manage theirs.
Keep It All Separate
In this situation, the couple kept their accounts entirely separate, but would split bills 50/50 as they came in. It reminded me of when I was living as a student with 4 other women. One person was assigned the joy of being the bill payer, and then everyone else contributed every month based on how much the bills were.
As you can imagine, this caused problems at times. For example, if one of us was away for most of a month, was it fair they paid their share of an electricity bill for the month they were away when the others were still using electricity as normal? What if someone wasn’t coughing up their share? This definitely built up resentment and put someone out of pocket.
Now this may just be a silly squabble between strangers, but could it still apply as a couple? In my opinion, YES!
If you choose this method, be absolutely honest upfront of what you can afford and get all the bills written down so you know what you have to pay and when.
Are you putting bills in both names (hint: you need to be on utility bills so you have proof of address to apply for a library card or to gain access to a GP for example).
Are you happy to pay for Sky Sports with your partner if you yourself can’t afford it or don’t watch it, for example. Maybe this is something your partner pays on their own?
This couple shared EVERYTHING (a bit like in my ex-relationship). They had a joint account, and income from both people got paid into the account. Then the money was used to pay bills, pay off debts etc. Spending money was distributed as a kind of “spending/pocket money” every month.
This is great if you both agree on the amount. But what if you don’t? I personally felt that this couple were unbalanced. She was restricting her own spending to pay off debt (that was joint debt by the way, not personal), and he had money to buy food at work for lunch, and to spend on whatever he wanted, like clothes etc.
She claimed she didn’t mind, but I would be very wary of this. Eventually this is going to feel restrictive, and she may even grow resentful, putting their relationship under avoidable pressure.
If you use this method, then be very careful that things are evenly distributed and fair. If one of you earns more, are you happy with this set up?
Separate and Together
This is my personal favourite, and how I choose to deal with my finances with my partner. We have our own money in our own accounts. Then, every month we have a direct debit lump sum that goes into our joint account to pay for the mortgage, bills, groceries and date nights. We review it periodically, and if necessary put in more. We split evenly because our income is roughly the same. If you don’t earn the same, then put in a different ratio so that it is fair. Bigger purchases are discussed and paid for separately. I think its good, because we have freedom with our own money, but the bills are still covered in a fair way.
My advice is to ensure that you discuss everything first, don’t make any assumptions, and certainly don’t use the joint money for anything not in the budget unless you’ve both agreed it first.
Another couple I have met distribute bills between them. One pays all the household bills, while the other pays for groceries and household goods. They say that they are roughly even in contribution, and it seems to work for them.
I think this could work well, but as mentioned above, you need to be named on utility bills in order to have proof of address. Make sure you take this into account when planning who pays what. Also, what happens if one pays more than the other one month? Is this ok, or will you have a system for making it more even?
Trust Each other
Ultimately, how you manage your finances is up to you as a couple. It should be about trust and not control. If you think your partner is withholding money from you as a way to control you, then this constitutes domestic abuse, and IS NOT OK. Please get help if you think this is you.
Getting to this stage of your relationship should be an exciting time. Don’t let money come between you, and plan properly before jumping in. Good Luck!
Now over to you – what is your money-relationship style? Comment below or in my Private Facebook Group!