5 Ways to Manage Your Finances As A Couple

Should I play it solo or are we in this together?

5 Ways to Manage Your Finances As A Couple

For richer, for poorer… so the marriage vows go. But with 1/3 of couples reporting finances as a major source of conflict, we know it’s not always plain sailing trying to combine matrimony and money. For one thing, it’s not as straightforward as everyone wanting to share their funds: some couples operate completely separate bank accounts and split their bills 50/50 or according to some other pre-agreed ratio. Others prefer to share most responsibilities but keep a bit apart for private use (who said anything about a secret handbag fund?).

The best way to avoid banking bust-ups is to make a workable plan and be open and honest with each other from the outset. And just keep talking about money, so it doesn’t become a taboo subject. But even if you’re in an established relationship and feel that your financial life needs a spring clean, the following top tips should come in handy.

1. Are your credit scores as compatible as you are? If one of you has a poor credit history, beware of going all-in together, or you could be “co-scored” aka tarred with the same brush as your debt-ridden partner. Also, you should probably avoid using emotive language like “tarred with the same brush”.

2. Set limits – and stick to them. You’re probably going to be sharing the bills for utilities, housing and food. If one of you decides to splurge a thousand pounds on a cashmere coat one day (Impulse buys. They happen) that could seriously impair your ability to pay your share of the bills that month, leaving your partner in the red – and you red-faced. So agree on a figure beyond which all purchases need to be checked with the other person. It could be £50 or £500 depending on your situation.

3. Try before you buy… if you’re not sure about completely combining your finances, why not start by opening a simple current account together and just using it for one or two agreed expenses, to see how it feels? It could be something fun like a hobby or holiday fund, or have a more practical purpose like the weekly supermarket bill. This will help you get a feel for budgeting together without being overwhelmed.

4. Safety in numbers - what works best for many couples is having two accounts each. A joint account that you both share, plus a private account just for you. Again, honesty is key here. This isn’t about contributing 5% of your monthly earnings to the joint account and squirreling away the rest of it for “personal expenses”. But once you’re both putting enough in the joint pot to cover essential bills, it’s nice to know you each have a little something to use for gifts, surprises, and weird personal choices that your other half doesn’t want anything to do with eg. fish pedicures.

5. Equality, equality, equality! No, we’re not talking about equal pay (for once), but equality of understanding. One of the most financially toxic things you can do is be in a relationship where one person understands a lot about finance and the other one knows nothing. Actually, that’s not just financially toxic – it’s toxic full stop! However boring or difficult your partner might find interest rates, tax allowances and ISA’s, he/she MUST MUST MUST get himself/herself educated. Or you won’t be making decisions as a team. And the one with all the knowledge will have all the power. And while that might sound appealing, it really isn’t. Because power = responsibility.

Ultimately, money represents power and power is a flash-point in any human interaction, so it’s unlikely you and your partner will never, ever row about money. But if you keep the channels of communication open, and plan practically, then you should be able to nip trouble in the bud. And if you can’t, there’s no shame in seeking counselling or mediation to prevent your money gripes snowballing in to something that a judge has to sort out for you.