Money Management For Couples: Building A Financial Harmony

Introduction

Hi Stress-free Budgeteer! Are money matters causing tension in your relationship? Don’t worry, I've been there too. 

Today’s topic is for couples who want to align their financial goals with their partner.

As someone who knows a lot of people struggling with money problems– I too, know the feeling of the seemingly endless arguments my partner and I have had in the past – and I can help you avoid those problems by reading this blog post.

But that's not all! I'll guide you through the art of splitting bills, discuss the importance of setting short-term and long-term financial goals, and answer burning questions like whether couples should split the bill 50-50.

So, let’s get started!

Laying Down the Groundwork

I can't stress this enough: laying the groundwork is absolutely crucial for a harmonious financial partnership.

When it comes to managing your finances as a couple, understanding this fundamental idea can save you from financial turmoil and countless disagreements.

And you can lay down the groundwork by:

• Getting on the same page
• Keeping track of your bills and expenses
• Deciding whether to combine your finances or not
• Discussing your goals moving forward

First, let me share a personal experience to paint a picture for you:

When my partner and I had just begun discussing our personal money management strategies, I realized we were speaking in entirely different languages. 

After a lot of conversations (and coffee), here's what we did, and it's a technique I highly recommend: 

We set aside some quality time, grabbed a couple of notepads and pens, and had an open and honest conversation about our financial goals and values – it was eye-opening.

We discovered that our approaches were vastly different. I wanted more freedom with our lifestyle and to enjoy life without the financial stress, and he wanted a steady life that was grounded in practicality and the now. 

But there was one thing that we could agree on– we both wanted a secure future, not just for us, but also for our kids.

This conversation helped us understand where each other was coming from. We were able to bridge the gap between our financial mindsets and craft a plan that suited both of us.

Getting on the Same Page

“So Karin … how can I get on the same page with my partner like you did with your partner?” You can start by following the advice below:

1. Schedule “Money Dates”

   First, set aside a time to specifically talk about your finances. It could be over a cup of coffee in the morning, a glass of wine in the evening, or during a leisurely weekend walk.

   The key here is to create a comfortable space where you can both open up.

   After that, you can casually bring up topics like the following:

   • Are we reaching our goals?
   • Are there any problems or setbacks?
   • Do we have new expenses that need to be planned for?
   • Are you frustrated or have something to say to me about this conversation?

2. Be Honest and Vulnerable

   Next is to be completely transparent about how you feel talking about each other’s money habits. I know that money can be a touchy subject, and it’s completely understandable.

   We all have our personalities and past experiences– but becoming vulnerable in this state can create a stronger bond between you both. Start by sharing your financial history, your money goals, and your fears and where they come from.

   Note: It is VERY important that each person gets an opportunity to speak without judgements, interruptions and criticism.

   Empathy and consideration is the cornerstone of this step. Remember, this is your partner being an open book to you and speaking what’s on their mind.

   You have to make sure that they feel that they have been heard and avoid dismissing or being critical of their feelings.

3. Understand Each Other’s Money Personalities

   Did you know there are different personalities when it comes to handling money?

   Some are savers, some are spenders, and some are a little bit of both. Understanding your partner's money personality and where they come from can help you navigate decisions together more easily

   Now, I'm not saying you need to agree on every little detail. In fact, having some healthy differences in your financial perspectives can be beneficial. Understanding each other's priorities and finding common ground is the way to go here!

4. Understand That No Plans Are Set in Stone

   Of course, even if you and your partner worked it out in the end and have some plans set up for the near future, you have to understand that these plans can change in the blink of an eye.

   For example, a small windfall of money such as an unexpected bonus, can solve some of your problems instantly– leaving no room for any of your plans.

   On the other hand, a sudden health complication of one of your family members can throw those plans out the window.

   But in order to gain some traction to achieve goals, we recommend leaving a plan in place for at least a month to see how it goes before making any substantial changes

   Whatever you agree on, try to stick to it for a month and then re-evaluate. Unless it is an emergency or causing you a lot of stress/problems in which case, discuss earlier.

Keeping Track When Bills Are Due

Picture this scenario: You're enjoying a cozy evening at home, and suddenly your partner says, "Hey, didn't we forget to pay the electricity bill?"

Cue the frantic scramble to find the bill, log in to your online account, and make a late payment– sparking a potential argument between you two. 

What makes this deadly is that there are aftershocks to this problem. After arguing and sleeping in different beds or separate rooms, the next argument may lead to one of your kids walking in and seeing their parents fighting for something as simple as paying bills– which then risks causing unwanted trauma and stress for your child.

Sound familiar? It's happened to the best of us. Let's dive into how you can avoid this stress and save your family from a world of arguments:

1. Creating a Shared Calendar

   The first step is to set up a shared digital calendar and use it to keep track of bill due dates that aren’t on automated payments.

   You can use your phone’s calendar to add reminders a few days in advance to ensure you’re never caught off guard.

   If you’re not a big fan of listing down important decisions on your phone where they are forgotten, a visual reminder is always a VERY good option.

   For an alternative option, you can use a document you can write on like our Monthly Bills Tracker and stick it on the fridge as a reminder so due dates won't sneak up on you.

   Additionally, you and your partner can also dedicate some time each month to review your upcoming bills together. This monthly check-in can also help prevent any surprises coming your way and ensures you're both on the same page.

2. Pre-assign Responsibilities

   Most couples find that they can keep track of bills more easily when it’s pre-assigned to someone (we’ll get the chance to talk about this more later in our blog.)

3. Automate Payments

   Whenever possible, set up automatic bill payments. This ensures that bills are paid on time, and diminishes the chance of late fees significantly.

   Thankfully, this tip was now made obsolete by technology. Most banks and apps today have features that allow you to set up notifications for bill payments and account activity.

   However, you still need to budget for your bill payments, which is why I’m a big believer in having a separate “Bills” Account that you can take from whenever the bill falls due.

Combining Finances

Now that we've covered the essential groundwork, talked out our needs vs. wants, and learned to keep track of those pesky due dates, it's time to address the elephant in the room – combining finances.

But first, what are the pros and cons of combining them? Let’s start with the pros.

First, you get the transparency you need. When you combine finances, you get a clearer view of your financial situation as a couple. 

Hidden surprises or secret accounts are down to a minimum– but it can still happen!

Next, you’ll have a more streamlined budgeting experience. If you have a joint account set up with your partner, managing expenses like rent or mortgage, groceries, and utilities becomes a breeze.

Plus, since you and your partner are in the same boat now, joint accounts also mitigate the risk of one person not paying their portion or share of a bill or expense.

Lastly, you’ll promote sharing the same aspirations with your partner. Combining your accounts will make you share responsibilities– which will strengthen your bond with each other and foster a more enduring relationship between the two of you.

What about the cons, though? You might not get the same freedom with your money as you previously did. Some people feel that sharing accountability means losing control of your money, which can be partly true. 

Sharing accounts may also cause money-related arguments, if not managed well. 

For example: Imagine, you and your partner share accounts, but have different approaches when saving. You prefer to save aggressively, while they spend a nice amount on their hobbies.

Of course, this might feel unfair to you since you might think they’re not thinking about the future, and instead focus on living in the present.

This might lead to frequent arguments about priorities and might cause tension in your relationship.

A good compromise to this problem is to have a weekly/bi-weekly/monthly allowance they can spend on anything they want.  I’ll discuss this in detail on Joint Accounts with Allowances.

Now that you and your partner are responsible for your money, the other can chastise the less financially responsible person for their spending habits, which can lead to some disagreements here and there.

Choosing a Decision

Now that we have discussed both their advantages and disadvantages, it’s time to make a decision with your partner by either deciding to combine your finances through a joint account (or not),

Joint Accounts

A joint account is like a shared money pool where both partners contribute and withdraw funds. It's often used for covering shared expenses like rent or mortgage, groceries, and utility bills– and kids, kids are expensive…

Some accounts also attract monthly fees so having one joint account can save on fees, too.

This account is for you if you believe in sharing both your financial responsibilities and joys with your partner.

Joint Accounts With Allowances

Function the same as joint accounts, only that you and your partner have a separate spending allowance you can use for your own leisure. The allowance can be withdrawn weekly, bi-weekly, or monthly.

This is for you if you and your partner want to transition to becoming financially responsible while still enjoying your hobbies.

I personally recommend this option since both you and your partner can still have an account in their own personal name, but have the same allowances transferred to each of you.

This money can be used at your own discretion, without any judgment from either the two of you. Spend it, save it, or use it for whatever you want, no questions asked.

Separate Accounts

Separate accounts mean just what they sound like – you and your partner maintain individual bank accounts alongside any joint accounts you might choose to have.

You and your partner can opt for this account if you would love to pay for both of your responsibilities while still having independence from one another.

Of course, all of these options require a certain level of TRUST between you and your partner.

Determining which strategy works best for you also depends on the level of trust you have in each other AND yourself.

Discussing and Agreeing on Goals

After discussing whether to pool your money or pay for responsibilities separately, you and your partner should focus on having shared milestones that you can achieve as you grow together.

The key to achieving such milestones is to be specific: What is the goal and WHY do you want to achieve it?

You and your partner can have different goals, but having the conversation and documenting those goals is important to make sure both of your spending habits stay in line with your short and long-term goals

How? Start by dreaming big, like buying a house or taking that trip that’s been on the back burner for too long. Then, get specific piece by piece, prioritising what’s most important to both of you to break it down into doable goals.

Some people also prefer a visual reminder for their BIG goals– with some even creating a vision board or an image of what they desire close to them. I recommend having one right on your fridge so you can see it every day and manifest your goal more easily.

After that, you can easily develop a financial roadmap that outlines how you’ll reach each of your goals, then break it down into little steps so it doesn’t feel so overwhelming.

 Remember, goals without a plan are just wishful thinking! So make sure to do this crucial step. 

Lastly, make it a habit that both of you regularly adjust your goals in line with certain life changes. 

Celebrate wins, update your goals if needed, and keep reaching those milestones you put up– together.

FAQs

Conclusion

So, what’s the takeaway here? 

Remember, setting these money goals isn’t just about combining finances with your partner; it’s about opening up with your partner and TRUSTING them to make these big financial decisions– together.

Your goals are just here to make that journey a little bit easier for both of you.

Got any queries or thoughts to share? Feel free to reach out. If you found this couples guide particularly helpful, you’ll love the other articles in our blog.