Let’s be honest: how a couple (mis)manages their finances is one of the sources of many marital conflicts. It can even make or break a relationship, which explains why couples tend to shy away from having discussions about money matters.
However, when you’re a married couple, managing finances is a daily part of your life together and there’s no way to run away from it.
Setting aside differences and being open to working together is the first step to managing your money as a couple. Financial planning for couples is about learning about each other’s long-term goals and attitudes towards money to build a strategy that works for both of you.
Here are a few ways that couples can approach money and avoid financial stress.
1. Decide whether to have a separate or joint account
There’s no one-size-fits-all rule on how to handle finances in a marriage. Some couples believe in merging their finances in a single account, while others prefer to keep it personal by having their own accounts.
Either way, there are advantages and disadvantages.
A joint account can simplify payment matters. You don’t have to calculate monthly contributions and payment responsibilities.
Plus, all household expenses are paid using a single account, making it easier to track the money that goes in and out, but you won’t have control over your money. Every expense that you want to make needs to be discussed and agreed on first.
Meanwhile, having separate accounts gives you more freedom on your own money and prevents disagreements over spending habits. The catch is, you’ll have to discuss how to pay for household expenses and whether they will be split equally or proportionally to both incomes.
Before deciding on this one, it’s a good idea to have a conversation about your individual values and goals when it comes to money.
2. Be honest about your financial situation
Managing finances as a couple requires each other’s complete trust for it to work.
The truth is, it’s unlikely for someone to enter a marriage without carrying any form of financial baggage, but what's important is that you’re transparent about your financial situation.
It can be uncomfortable if one party has more debt than the other, but having that conversation is crucial to strengthen and avoid feelings of distrust in the marriage.
Whether it’s a personal loan or student debt, disclose everything and how much you’re putting down each month to settle it with your partner. Being upfront about these financial issues help lay the groundwork for open communication about money management as a couple.
3. Ask about each other’s spending habits
By now, you probably have an idea of your spouse’s spending habits, but asking them directly will help you learn to understand their values and attitude towards money better.
Ask them questions about their thoughts on having extra money, their definition of huge purchases, and their long-term financial goals with you.
People have different money habits, but as a couple, it’s important to find a common ground when it comes to spending.
In a marriage, your money is no longer just yours (especially if you have a joint account), so every financial decision impacts not only you but also your spouse.
4. Define your collective money goals
As a couple, try to establish financial goals together as early as possible. Whether it’s having a secure educational fund for the children or being able to travel multiple times a year, list them down so you know how you’re going to spend and save money today.
After setting financial goals, agree on the steps you’re going to work on together in order to achieve them. There’s a chance that both of you will need to cut back on monthly expenses and reassess how you’re spending your salaries.
Instead of saving up for a fancy car, agree that you’re going to set aside a chunk of your savings to achieve your financial goals.
By having a shared goal as a couple, you become more confident in your spouse’s financial decisions because you’re working towards a common goal.
5. Give each other financial freedom
Nobody likes the feeling of being micromanaged, especially when it comes to finances.
Unfortunately, it’s a common feeling experienced by married couples, but it doesn’t always have to be the case.
Giving your spouse some leeway for discretionary spending avoids having to hide every time you’re making an unnecessary purchase.
After all, everyone gets tempted by the sight of the latest top-of-the-line gaming equipment or expensive skincare. Getting berated for rewarding yourself once in a while doesn’t feel good, especially when it comes from your partner.
6. Don’t hesitate to ask for help
If you’re having trouble managing finances with your spouse, it could be a good idea to talk to someone who understands your concerns. This could be a fellow couple friend, your parents, or even a financial advisor with experience in financial planning for couples.
In some cases, it’s important to update your wills and other legal documents to ensure that both your partner’s and your wishes are reflected. Then, remember to review these documents every year or when there are any changes to your circumstances.
7. Disagree, but with respect
Even the most compatible of couples have their differences and disagreements, especially when it comes to money.
However, being in an disagreement about finances with your spouse doesn’t mean saying hurtful words at each other. When you have a complaint about their spending behaviour, bring it up without using negative words that can be misinterpreted.
The goal in a conflict should always be to come up with a compromise or solution that both of you can agree on to continue working towards your goals.
Remember: couples who are open about their finances and respect each other’s decisions rarely find themselves fighting about money.
Managing money as a couple
At the end of the day, there’s no one right way to manage your finances as a couple, but as long as you trust each other and keep an open communication, you can power through any financial woes along the way!
If you want to find out more about marriage and finances, or simply need financial planning tips as a couple, send us a message! We can connect you with experienced financial advisors who can help you achieve your financial goals together.
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