For many couples, money management and finances are the single trickiest aspect of their relationship. In fact, finance is actually the leading cause of stress between partners. Researchers at Kansas State University found the frequency of money arguments is the top predictor of whether or not a relationship will last. These clashes take longer to recover from, and are more intense than most other types of arguments a couple will have.
When two financial situations merge, there’s always going to be an adjustment period—at least until the two of you have settled into a financial rhythm. There are many complicating issues such as credit card debt, unpaid student loans, and whether one partner is the clear breadwinner; these factors must be addressed. It’s not enough to say “We’ll cross that bridge when we come to it” and brush matters under the carpet—that serves only to exacerbate financial problems and arguments at a later date. The best option is to take the time to sit down together and work things out precisely, until a total and mutual agreement is reached.
Every conversation about money needs to start with each partner setting out their initial stance. What is their general view of money? What does it mean in their life? What significance has it held in the past? You’ll find numerous influences on one another’s outlooks not only from adult life, but also from your respective upbringings.
Before you can take the financial discussion any further, it’s important to genuinely understand where each other is coming from. We’ve all had vastly different experiences with money, so conflicts over finances from time to time is normal. What’s more, in the long run it can even be useful for two partners to have divergent views on money. Then they can give one another a gut check during pivotal financial decisions and help each other foresee and avoid frivolous purchases.
There are many scenarios in which you can adapt to your relationship’s financial situation. Today, let’s delve into seven of them.
Scenario #1: You share a checking account and stick to a budget
Both your incomes are deposited into a joint checking account, and you stick to an agreed budget. This requires complete transparency. Once you’ve sat down together and tallied up your joint income, you must then carve out a budget that covers all shared expenses, including bills, groceries, and day-to-day miscellany. With your finances totally intertwined, you need to get on the same page about spending and working as a team toward shared goals.
In this scenario, it doesn’t matter if one partner earns significantly more, because the budget is balanced with your collective pooled income. If one partner’s income rises or the other’s falls, they balance out. There’s no distinction between mine and yours since all funds and expenses are deposited into and withdrawn from the same account.
Scenario #2: Responsibility for different bills
Some couples allocate different expenses exclusively to one partner, which empowers them to feel ownership over those costs. This might be for groceries and the mortgage, while the other pays for utilities and their child’s education. Or larger bills are assigned to the significant breadwinner. Or grocery bills go to the person who always does the grocery shopping. Where there’s a will, there’s a way to make this partitioning of expenses feel fair.
Scenario #3: Work off a percentage
You both pay toward each expense, but the amount you contribute directly reflects the difference in your respective incomes. One partner earns 70% of the couple’s total income—they pay 70% of the bills. But you might want to continue with separate accounts, and additionally open a joint account for which you have equal privileges. Decide if you want to contribute to the shared account weekly, biweekly, or monthly.
Scenario #4: Combine finances, but both retain fun money
Similar to Scenario #1, your paychecks are deposited into a single account, from which all payments are made and into which all savings go—but you both have your own separate checking accounts, too, into which you receive fun money on a monthly basis. This approach combines the benefits that come with the transparency of uniting your finances with the freedom to each buy whatever you want on your own time, without the need for discussion. Of course, it’s crucial to work out a precise figure for your monthly fun money—and do you both receive the same amount? Or would you prefer it to be proportional to income? Furthermore, address any gray areas in advance: If just one of you takes your child to the zoo, is that a “fun expense”—or a shared expense?
Scenario #5: Split bills 50/50
Every expense is simply halved between you. You both contribute the exact same amount of money toward not only bills, but also expenses such as vacations and date nights. This gives you control over your own money but is an easy way to share expenses with your partner. On the downside, if one partner makes significantly more, this approach may put a strain on the other. The 50/50 approach also has implications for big future purchases, such as a house or car.
Scenario #6: Keep your finances separate
Your money doesn’t intermingle at all, and you retain individual bank accounts, budgets, and bills. You control your own money, and don’t rely on your partner financially. This can be useful if one of you isn’t great at budgeting. This is certainly an easily comprehensible approach: You worry only about yourself, your accounts, your investments. But it can also quickly become difficult if you start worrying about your partner’s finances and the impact they’re having on the relationship. Moreover, it’s practically impossible to share no expenses, so matters can get confusing.
Scenario #7: You both live off one income
All expenses are paid from just one partner’s paycheck, while the other’s goes straight into savings. This ensures you’re always putting money away, and encourages you both to find smart ways to save and get by. Couples who adopt this approach generally live off the income of the higher-earning of the two, but you might reverse this if you’re happy to live with relative frugality while saving for a massive purchase, such as a house. Many couples can’t afford this approach, especially if they’re paying off debt.
There’s no single best practice for budgeting as a couple
Once the two of you find a method that works well for your relationship, don’t be afraid to tweak it every so often, or sit down periodically to discuss how it’s going. You might experiment with different approaches to identify which suits you both best, and feels most natural and fair. Expect some disagreement along the way—that’s normal. But as long as you’re transparent about how the agreement makes you feel and communicate regularly and well, there’s no reason financial decisions should be damaging the relationship. And if you need a little extra advice discussing money with your partner, we can help.
Maclynn International is an elite, multi-award-winning matchmaking consultancy with offices in New York, California and London. As relationship experts, we are highly experienced in enabling people to address the problems they’re facing in their love lives. Get in touch today, and let’s help you formulate your thoughts about your financial situation before you start a discussion with your partner.