How to manage money in harmony as a couple

There's no doubt managing money together can be tricky, but following these top tips could stop money conversations becoming a turn off...

As one of the biggest issues couples fight about, money is one of the leading causes of breakups in the UK. So, this Valentine’s Day we wanted to share some guidance on how you and your significant other can manage your money in harmony.

More people than ever are facing financial pressures due to rising living costs, putting pressure on both themselves and their relationships. With rising bills causing concerns over how much heating is being used in the home and what is being spent on the weekly food shop, many cohabiting couples are reaching boiling point with their finances.

There's no doubt managing money together can be tricky, but following these top tips could stop money conversations becoming a turn off...

Make sure you’re on the same page

Trying to understand each other other’s approach and attitude to money is the best place to start. Chat about how you manage your personal finances currently, and what works for you as an individual. 

Disagreements about money usually come down to differing or conflicting attitudes toward earning, spending, saving, and sharing money, so look for the areas where you agree – and disagree – and spot any potential problems before they happen.

Some common disagreements are when one half of the couple loves to save and one half loves to spend. If you are joining your finances, it’s important that you both understand what each other's expectations are.

Set boundaries

Like every other aspect of your relationship, you should set boundaries around your finances. There might be some aspects you’d be happy to share, but others you’d prefer not to. Be clear on the independence you’d like to maintain. 

This could be deciding to have a joint account for bills if you live together, but keeping your individual accounts for things like clothes or entertainment. You can still work together towards your financial goals, while retaining a little bit more of your individuality and control over your finances.

Be honest

The best way to avoid conflict over money is to be open and honest. Start by being honest about the current state of your finances, letting your partner know about your debts, loans, credit history, spending habits, and your money goals. 

Prevent issues before they happen with an honest stream of communication, to make sure there are no nasty surprises further down the line. Ideally you should be sharing it all: the good, the bad, and the ugly, to be able to manage your finances effectively as a couple. 

Set a joint money goal

Talking about bills or debt can feel quite heavy, so set money goals that feel positive too. Is there something you could both save up towards, like paying off a credit card, or booking a weekend away, that would drive you both towards your financial goals? Managing finances together shouldn’t always be doom and gloom, and remember, you’re in it together. 

When you talk about money, try not to use judgemental language. Instead, keep to the facts and explain what his spending habits have meant for the joint finances or your own.

Create financial resilience together 

Whilst it’s brilliant to save up for a fun money goal such as a holiday, it’s also important to make sure you have an emergency fund, both as individuals and as a couple.

To keep some financial independence, it’s a good idea to build up your own emergency fund should anything happen to disrupt your finances such as losing your job. We generally recommend saving enough to cover 3 months worth of bills. 

On top of this, if you live with your partner and share bills, it is a good idea if you can create a joint emergency fund to cover anything that could go wrong with the home you live in - such as emergency repair costs.  This will mean your individual emergency funds stay protected. You can start building emergency funds with a few pounds - saving little and regularly will soon build up.

Share the load and manage your own budget

It’s not a good idea for one person to manage all of the finances. A relationship is a partnership, and having a mutual understanding of your finances means you’ll both know what you can and can’t afford, helping you to avoid any disagreements. 

One person managing the finances can cause strain on a relationship either because one partner can feel that they have taken on too much responsibility and it should be shared, or because the partner who doesn’t have sight of the cashflow can feel they have no control. By sharing the financial responsibilities, even if it isn’t an even split, couples are working as a team.

By both halves of the couple understanding the finances, it also means that if something were to happen to one partner, the other would understand the financial situation and what was needed from them.

It’s important that before managing a budget together, that you are confident in managing your own finances first. There are plenty of money management apps on the market, including our app, where you can connect all of your accounts in one place, manage your outgoings and budget for the future. If you’re already on top of your own finances, then hopefully you will feel much more confident in managing joint accounts and outgoings. 

Take it slow 

Sharing an account is a big step, so it could be a good idea to test the water before you go all the way and share everything. It’s a good idea to keep credit cards separate, as being financially linked with someone else can affect your credit rating and potentially make it difficult for you to get new credit. Before making big commitments, be sure you know where you stand with your partner, and that you’re confident you’re ready to take any financial commitments.

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