Managing Finances as a Couple
Great money management as a couple requires great communication. When determining how to manage your finances as a couple, first zoom out and get curious about both of your relationships to money. Ask questions like how did your parents manage money when you were growing up? How did it influence how you spend and save money today? Level setting expectations around your loved one’s relationship with money will give you greater understanding of their less desirable money habits. Whether your partner gets stressed by making big purchases or spends money on too much “stuff”, it’s best to talk through these habits so you can support each other to execute a mutually agreed upon game plan.
Explore the different money management possibilities. Every couple is unique and will desire a different level of financial integration. Two remarried, financially independent adults may not choose to merge their finances, especially if they have children from a previous marriage. Younger couples building a life together may choose to fully merge their finances, especially if there is a large income differential or children are involved. Some couples fall in the middle, where they manage their personal finances, but agree upon a set contribution to shared household expenses and goals. Understanding there are multiple ways to design your money management system can take the pressure off and allows couples to create a system that supports their relationship, whatever that may be!
Talk about income differences and how it impacts your shared lifestyle expenses. If one partner makes less than the other, this must be taken into consideration when taking on new financial commitments, especially if you’re both expected to contribute half of all shared expenses. If this is the case, lifestyle decisions must be made off of the lower income earners salary. Anything above that will need to be subsidized by the higher income earner.
Create personal spending accounts. It doesn’t matter what phase of your relationship you are in or how you manage your money as a couple. This is a must. Each partner should have an independent checking account where they have the freedom and privacy to spend money how they please. Determining how much money to contribute to each personal spending account can be tricky for those with income differentials, but keeping the dollar amount as similar as possible will create equal opportunity and access for each person in the relationship, likely contributing to a healthy and happy partnership in the long-run