Newsflash! Money can be a source of contention for couples. Money can be a stressor even when just worrying about it for yourself. Add in another person’s opinions, goals, and financial decisions, and this can be a recipe for disaster. According to an article in the Interdisciplinary Journal of Applied Family Studies, there is a high correlation between financial disagreements and divorce – yikes!
The good news is, it doesn’t have to be this way. Today we will review the three ways couples typically manage their money, point out why some of those might not be ideal, and outline a recipe for success.
- Partners may see themselves as bringing respective strengths to their relationship – he’s good at cooking, I’m good at cleaning, so that’s how we’ll divide the labor in our household. This can sometimes lead couples to believe that because one person is good with money, and one person is… less good with money, that the partner that is “good” with money should be the one managing all finances. Wrong! It is not ideal for one person to be the captain of the family’s money. This can leave a partnership vulnerable if there is a disagreement on how to spend the family’s money, or worse, if the couple divorces or breaks up.
- In many partnerships, each adult manages their own finances. This can be a good way to manage money in a new relationship, but in longer-term relationships, completely separate money management can often end in confusion about financial decisions that affect the family unit and may cause a disconnect about money goals. If there is no communication about money, it might be hard to save for those big purchases a family wants to make as a unit, which can cause disagreements down the line.
- The third and most highly recommended way that couples manage their money is together. This does not mean that you share all accounts and completely combine all money – in fact, this is discouraged! This simply means that you are both on the same page about where your money is going and are consistently reevaluating shared goals together. Are you both interested in buying a house? Maxing out your respective retirement accounts? Going on an expensive vacation together? These are things that can be planned together and should be discussed frequently.
To make this work, many couples decide that each partner should set aside an agreed upon amount toward expenses for both of you. Practically, a couple can decide on an amount or a percentage of income that goes into a shared account for shared/family expenses (such as rent and bills), with each person also keeping their own respective accounts for personal use.
One way to make money talks less painful is to plan “money dates” – my partner and I sit down and reevaluate our income, money goals, and savings every two weeks. Because we do this frequently, this money date usually takes us 30 minutes or less – and then we have time set aside for an actual date!
About the Author: Diane Darling is a 3rd Decade graduate who holds a Masters in Family Studies and Human Development – she loves studying relationships and personal finance respectively, but has a unique interest in researching how couples can most effectively manage and communicate about their money.