Stay Together – Protect Your Wallet

A guide for money and relationships

Ever found yourself in a heated debate with your significant other over a pair of shoes you really want, or a new gaming console they've been eyeing? It's a common occurrence in many relationships, and while it might seem like a small disagreement, money can develop into a major source of stress and conflict.

When it comes to relationships, love may be priceless, but money management is definitely not. Whether you're just starting out as a couple or you've been together for years, how you handle finances as a team can have a significant impact on your relationship’s harmony and your financial future. In fact, the way couples manage their wallets together is often a good predictor of how well they’ll navigate life’s twists and turns.

Let’s explore some practical tips to help you and your significant other stay financially harmonious

Two Hearts, One Wallet: A Love Story

Here's the thing: being in a committed partnership opens doors to building wealth together that might be harder to achieve alone. A recent survey by Forbes Advisor found that a whopping 86% of respondents believe couples with similar financial goals and habits have smoother sailing in their relationships compared to those who don't.

Sharing living expenses, combining incomes, and aligning financial goals are all powerful tools couples can make the most of. But let's be honest, it also introduces its own set of challenges and potential pitfalls.

Getting on the Same Page

Money Attitudes

Let's face it, amidst the whirlwind of new relationship bliss, financial compatibility rarely tops the "must-discuss" list. But here's the thing: how you each view and manage money can have a major impact on your future together.

Think of it like your favourite pair of shoes – if one partner loves splurging on the latest trends while the other winces at anything over a tenner, those late-night shopping sprees might turn into arguments faster than you can say "retail therapy."

Understanding Your Money Stories

The truth is our financial habits and attitudes are shaped by our unique experiences. Did you grow up with parents who saved every cent? Or maybe you witnessed the stress of living payday to payday. These "money stories" play a big role in how we handle finances as adults.

Embracing Differences, Not Ignoring Them

It's normal to have different approaches to money. One partner might be a "max-the-credit-card" kind of person, while the other prefers the "cash-only" approach. Disparities in income can also add a layer of complexity. The key isn't to force yourselves into identical financial moulds. Instead, embrace these differences and use them as an opportunity to learn from each other.

The Power of Open Communication

Here's the magic bullet: talk openly and honestly about money! Discuss your spending habits, financial goals (dream holidays anyone?), and any anxieties you might have. Sharing financial decisions and plans fosters trust and avoids future conflicts.

Imagine this: by working together, you create a financial strategy that allows you to both save for the future and enjoy guilt-free splurges, within reason, of course! Talk about a recipe for building mutual wealth and a financially secure future together.

How Finances Should Be Split?

While there's no one-size-fits-all approach, the key to structuring finances as a couple is finding a system that works for both of you. Transparency and shared control are crucial. This means having access (and visibility) into joint accounts, and ideally, building a healthy emergency fund together.

Now, let's explore some common financial structures couples adopt:

1. Completely Joint: Everything goes into one pot, and all bills and expenses are paid from there. This is probably the most common approach, but it could now be challenged as the nature of the relationship changes. Some people enter relationships with more debts than others, and nowadays blended families are a lot more common, as are unconventional child-rearing arrangements between separated parents. All of these matters can make fully merged finances potentially less appealing.
2. Separate Accounts with Proportional Bill Sharing: Partners maintain separate accounts but contribute proportionally to a joint account that covers shared bills.
3. Separate Accounts with Agreed-Upon Splits: Couples keep separate accounts and split expenses based on a mutually agreed-upon method, like splitting rent/mortgage 50/50 and dividing utilities based on usage.
4. Separate: While some couples maintain entirely separate finances, this approach can make budgeting and planning for shared goals more challenging.

Interesting new research from the Indiana University Kelley School of Business suggests that couples who merge their finances may experience higher-quality relationships. This finding could be particularly relevant for couples looking to strengthen their financial partnership. It might be worthwhile to consider if a more collaborative approach to managing your finances could benefit your relationship overall.

Learn more:

• How to avoid fights over money
• Prenuptial agreements: safeguarding love and assets

Managing Money as a Couple

A healthy financial partnership requires honesty, transparency, and teamwork. Whether you're just starting out or have been together for years, aligning your financial goals and values is key to a secure and fulfilling relationship. By working together to manage your money, you’re not just building a financial future but strengthening your emotional bond – here are some practical ways to do that.

• Schedule Regular Money Dates: Set aside dedicated time, at least once a month, to discuss finances openly and honestly. This creates a safe space for both of you to express your views and concerns.
• Focus on "We" not "Me": Frame the conversation around building a shared financial future together, not individual wants.
• Compromise is Key: Neither of you may get everything you want but finding a middle ground that respects both your needs is essential. Be willing to adjust your spending habits for the sake of the relationship.
• Be Transparent About Debts and Assets: Honesty is crucial. Disclose any existing debts or assets you bring into the relationship.
• Celebrate Your Wins (Big and Small): Acknowledge and celebrate your progress towards achieving your financial goals together. This reinforces positive financial behaviour.
• Be Patient & Flexible: Changing financial habits takes time. Be patient with yourselves and each other and be flexible as your financial situation evolves.
• Build a Safety Net: Life can be unpredictable. It's crucial to have a plan in place to protect your financial well-being in the event of unforeseen circumstances. Discuss then lock in a plan of how you would manage mortgage payments or other essential bills if faced with unexpected events, such as one of you having serious health trouble.
• Agreed Discretionary Spend Amount: It’s simple — each partner gets a set amount they can spend freely, granting them the autonomy to make personal spending choices. This approach maintains financial independence while ensuring both partners continue to work together towards their shared goals.

Introduce Another Person Into Your Relationship?

Talking about money, big financial decisions, and future goals can stir up a lot of emotions. That’s where a financial adviser steps in as a neutral guide, helping couples navigate these conversations with openness and honesty. At Become Wealth, our financial advisers take a holistic view, looking at every part of a couple's financial picture — from income and expenses to assets, debts, investments, and retirement plans. We work with couples to create a detailed financial plan that aligns with their shared dreams and goals, making sure everyone is on the same page and working towards a secure future together.

The Bottom Line: Money and Relationships

By fostering open communication, setting shared financial goals, and embracing a team approach, couples can build a strong financial foundation for their relationship. Remember, it's not just about the numbers – it's about creating a secure and abundant future together.

While challenges may arise, the rewards of a united financial front are substantial. From accelerating wealth accumulation to weathering life's storms with greater resilience, financial harmony can significantly enhance your relationship.

If navigating the complexities of a couple’s finances feels a little overwhelming, seeking guidance from a financial adviser can provide invaluable support. At Become Wealth our experts are dedicated to helping couples create a financial plan that aligns with their unique goals and aspirations.

It would be the pleasure of one of our trained professionals to help you work through any of the topics mentioned above, so get in touch today.