This article discusses steps couples can take to have a healthy financial relationship. Different views and methods are explained for how couples might handle their finances. This article may contain affiliate links, for more information please see my disclosure policy.
Over 57% of divorced couples cite money problems as a major factor in ending their marriage. Money affects many aspects of life and when there are disagreements and difficulties it can cause major problems.
Many times money issues stem from a difference in opinion of how finances should be managed and where money should be spent.
I know firsthand the difficulties in managing money for two opposite ends of the spectrum. My husband, Allen, is a spendthrift and didn’t have a savings or retirement account when we met. While I did rack up some of my own debt, I have always valued savings and investment.
Together we have learned to compromise and find a method that works best for us.
When you are figuring out how to manage your money as a couple, follow these steps for success.
Recognize & Accept Differences
The best place to start when making a plan is to find out what matters to you and to your partner. Do you want to retire early? Do you like spending money on experiences and enjoying life now?
One of the easiest ways to do this is to have both of you make a list of the top things you think money should (or shouldn’t) be spent on. Take turns explaining why each item on your lists are important to you.
While I wouldn’t try to psycho-analyze your partner and have them tell you every single detail, but I think it is a good idea to get more of a background on where your partner got their money values.
For example, Allen grew up in a family that when they had money, they spent money and when money was tight they did without. In contrast, my mom works for one of the top retirement/mutual fund companies and I was raised constantly hearing about how she puts money in savings and when money was tight we relied on the savings. Understanding our different upbringings helps me better understand why Allen does like to save and plan out his money as much.
After you learn about your partner’s financial values, it’s time to find the middle ground. If you are at the point in your relationship that you are combining finances, clearly you love your partner for many reasons and already know that you can’t change them completely. So figure out how much you each are willing to give and come up with some financial goals.
Setup Money Meetings
Not to sound like a broken record, but communication is key in a relationship and that is no different for managing your finances. A dedicated money meeting is a necessity to managing joint finances and keeping everyone happy.
Even if one partner tends to handle all of the financials, it is important to meet so that the other partner doesn’t feel completely in the dark or like something is being hidden from them.
Figure out how often you want to have money meetings, weekly? Monthly? Bi-monthly? Allen and I have bi-monthly meetings and I would highly recommend it for couples that aren’t sure where to start. This way at the beginning of the month you can review how last month went and set goals for the upcoming month. In the middle of the month you can see how well you are sticking to your goals and make any adjustments to finish the month strong.
You can decide exactly what you want to talk about in your meetings but some possible topics include, budget/spending, debt repayment, investments, net worth, short and long term goals. While it is great to talk about all of these things, make sure the it doesn’t turn into dwelling on each other’s mistakes.
Try Different Money Management Methods
There are tons of different ways to handle money as a couple. Three of the most common ways include: completely joined, joined with separate fun money accounts, and completely separate. While these are pretty self-explanatory, let’s take a look at each one a little more in depth.
Couples that manage their money completely together will typically just have one joint checking account that all their expenses are paid from. This method usually works best for couples that have similar spending habits. It can also simplify your finances by not having to worry about setting up transfers and having a million bank accounts.
Another common way for couples to manage money is to have one joint account that major bills (mortgage, utilities, groceries, etc) are paid out of and then each person keeps a separate account for fun money that they can spend however they see fit.
Allen and I use this method. We each get a small weekly “allowance” transferred from our joint account into our individual ones for us to use on smaller spending. This method helps us avoid silly arguments about if I really need to get my nails done or does he absolutely need another video game; if we have money in our individual accounts, it is fair game.
One the opposite end of the spectrum, some couples choose to keep their money completely separate. Shared bills are split for each person to pay their part and then each partner does want they want with the leftover money. This method works well for couples that have very different spending habits or have a large difference in income.
Don’t be Too Hard on Each Other
As with anything with life, people are going to make mistakes. Sometimes with finances, especially when you have differing views, it is easy to be hyper-critical of your partner’s mistakes.
When mistakes happen, don’t play the blame game. Instead make a plan of how you can get back on track together and how you can prevent the same mistakes from happening again.
Leave a comment letting me know how you manage your money as a couple or a challenge you have faced with your partner and money.
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