“I don’t care too much for money, for money can’t buy me love.” (The Beatles)
For many couples, money is a regular source of tension. And, unfortunately, this can have serious consequences.
In a study by researchers from Utah State University and Kansas State University published in 2012, the researchers found that financial arguments in a marriage are stronger predictors of divorce than any other common disagreements. And when you consider how much financial stress many people are under at the moment, this is a significant finding.
But money need not be a risk to your relationship. Couples can develop healthy ways to navigate this minefield. And that starts with having a shared approach to dealing with your finances.
Honest communication is a crucial first step. As soon as partners decide to start living together or begin to share any significant aspect of their lives, they should also start having conversations about their finances.
This might sound crude, but if two people are going to commit to living together, they should know what each of them earns, how much debt they have, and what their wealth goals are.
This is not about judgement or comparison. It is necessary to understand what each one is bringing to the relationship.
Being honest about this from the start means there is less chance of ugly financial surprises later. Having a clear understanding of each other's financial situation is also the first step in building a solid foundation for financial planning.
Couples should also recognise that historical gender roles can be a challenge. Unfortunately, there is still a widespread assumption that men are better at managing money than women.
This can negatively affect male partners who might feel like they have to take on this responsibility even if they don’t have the necessary skills to do so. Female partners might also think that they are being supportive by not questioning anything money related. The result is that neither really has a handle on the couple’s finances and that causes mistrust.
Same sex couples can also encounter problems since a lack of defined roles might result in neither partner taking responsibility, or both wanting to be in control and coming into conflict.
There is, however, no inherent reason why either men or women should be better at managing finances. And it is in any case far better for partners to work together to develop a shared understanding of their financial situation.
At a basic level, couples should budget together. Even in cases where partners keep separate budgets, there should still be agreement on who pays what when it comes to shared expenses like groceries or insurance. There should also be an understanding around how much it is appropriate to spend on non-essentials like streaming services.
Nobody wants to feel like they are paying too much or that their partner is not contributing their fair share. That is a guaranteed source of conflict.
To avoid it, partners could commit to paying a share of expenses in line with their incomes. That way fairness is established, and they both have a similar amount of disposable income each month.
A simple way to manage this practically is to set up a joint bank account into which each partner pays their share at the start of the month. All shared expenses are then paid from there.
Managing your finances should not just be a slog. Couples shouldn’t lose sight of the fact that their money should be an enabler that helps them to live the life they want to live together, rather than a burden.
It is important to have regular check-ins to make sure your financial situation is being managed, but to make this more fun and engaging it could double as a date night. This can also be linked to developing rewards to make financial goals more tangible.
To celebrate reaching a savings goal, or staying within budget, for example, a monthly date night could be upgraded to a weekend away. This creates a more positive atmosphere around financial planning, making it less of a chore and more of a shared goal.
Rewards don’t have to be big things. They could be a nice dinner or a something special for the home. Just the acknowledgement of a real reward can be a positive motivation for partners to stick to a budget and stay on track to reach their goals.
Ultimately, the key to successfully managing finances within a relationship is a willingness to work together. Having a shared understanding and appreciation that both partners have an important role to play, and that goals should be agreed on together will go a long way to reducing the risk of money ruining a relationship.
To discuss putting together a joint financial plan, speak to a professional.
Complete Your Financial Plan
Sign Up To Our Mailing List
August 4 - How to Take Advantage of the Donations Tax AllowanceAugust 3 - Five Reasons why a Financial Windfall Must be Managed CarefullyAugust 2 - What’s Cooking with the Three-Pot System?August 1 - Make Sure Your Family is Financially Prepared for When You Pass AwayJuly 4 - A Must-Have for Couples who Choose not to Tie the KnotJuly 3 - Can Gratitude Make you Feel Better About Your Money?July 2 - Four Ways to Make the Most of RetirementJuly 1 - How to Invest When There’s So Much Bad NewsJune 4 - The Ins and Outs of Compulsory AnnuitiesJune 3 - Who is Influencing Your Financial Decisions?June 2 - R is for RebalancingJune 1 - Don’t let Money Ruin Your RelationshipMay 4 - Five Ways to Teach Kids About MoneyMay 3 - Much Ado About RiskMay 2 - Living Wills: A Must Have, Despite the Grey AreasMay 1 - What is True Wealth?April 4 - How the 2023 Budget Will Impact Your PocketApril 3 - Three Financial Imperatives for Women in DivorceApril 2 - Should You Ask ChatGPT for Financial Advice?April 1 - Compound Interest: The Eighth Wonder of the WorldMarch 4 - How a ‘Safe’ Fixed Deposit Might Still be RiskyMarch 3 - Thinking of moving to Australia? Bear these numbers in mindMarch 2 - Avoid These 6 Barriers to Wealth CreationMarch 1 - How Good do You Think You Are at Investing?February 4 - Is Money Stress Taking a Toll on You?February 3 - Why an Endowment is One of the Best Ways to Invest OffshoreFebruary 2 - Why too Much of a Good Thing Can be a Bad ThingFebruary 1 - Invest With FIRE and Never Look BackJanuary 4 - Why Lottery Winners End up Broke: The Importance of Your Financial ContextJanuary 3 - Discover the Freedom of a Tidy PortfolioJanuary 2 - Why You Absolutely Should be Investing in EducationJanuary 1 - Four Simple Steps to Start the Year on the Right Financial Foot
December 4 - What is This Volatility Risk People are Always Talking About?December 3 - Why You Need to Watch Out for The Butterfly EffectDecember 2 - 6 Ways to Achieve Financial FreedomDecember 1 - Three Books for the HolidaysNovember 4 - The Question of LoyaltyNovember 3 - Why do we Even Have Bull and Bear Markets?November 2 - Should I Buy a Holiday House?November 1 - Put Stocks, Rather Than Socks, Under the Tree This ChristmasOctober 4 - Can You Take Out Life Insurance on Someone Else?October 3 - Loss Aversion and Lifestyle Creep – How Behaviour Influences SavingOctober 2 - Why Timing Might be Everything in Retirement – Especially in a Bear MarketOctober 1 - Get Rich - Stay Rich Eight Mistakes Wealthy People Never MakeSeptember 4 - Capital Gains Tax: 10 Common Questions AnsweredSeptember 3 - The Risk That Many Investors Don’t Think AboutSeptember 2 - Much Ado About Regulation 28 and the Private InvestorSeptember 1 - The “Two Bucket” Retirement Savings System: What is it and Why is it Important?August 4 - Retirement Planning for Age-Gap CouplesAugust 3 - A Simple “50-15-5” Budget Hack for Women (and Men!)August 2 - Does Your Family Need a Constitution?August 1 - Women’s Month: Three Ways You Can Improve Your Money HealthJuly 4 - Five Things to Check When a Loved One Passes AwayJuly 3 - Rules of Financial Planning For a Special-Needs ChildJuly 2 - Why Your Financial Plan Should Cater For Possible DementiaJuly 1 - Why Inflation is the Most Important Investment BenchmarkJune 4 - How Relevant Is The 4% Rule of Thumb These Days?June 3 - Why You Should Treat Your Finances Like Your HealthJune 2 - Is Your Business Good Retirement Capital?June 1 - With the Limits Raised, How Much Should You Invest Offshore?May 5 - Quote of the Month: Challenging the Rejection of an Insurance ClaimMay 4 - Financial Products: The Less You Understand, the More You PayMay 3 - The Miracle of Investment Debit OrdersMay 2 - Five Things to Think About as Interest Rates RiseMay 1 - Stay Calm When the Bear ProwlsApril 5 - Quotes of the Month – The War in UkraineApril 4 - Smart Ways to Give: During and After Your LifetimeApril 3 - Take These Three Steps to Break the Money Shame SpiralApril 2 - When Things Don’t Go According To (The Financial) PlanApril 1 - What Amazon and Ford Can Tell Us About DiversificationMarch 4 - Quotes of the month – What the NFT?March 3 - How to Avoid Losing Your Life’s Savings to a “Tinder Swindler”March 2 - The Different Ways to Invest: What Does It All Mean?March 1 - Three Reasons You Shouldn’t Wait to Talk to Your Kids About MoneyFebruary 6 - Quote of the Month – Don’t Cash In Your Retirement SavingsFebruary 5 - Should You Top Up Your Retirement Annuities Now?February 4 - Don’t Let Delays in the Master’s Office Leave Your Family in Financial DistressFebruary 3 - Don’t Let Delays in the Master’s Office Leave Your Family in Financial DistressFebruary 2 - Three Reasons an Insurer Could Cancel Your PolicyFebruary 1 - Investing: Men and Women See Things DifferentlyJanuary 4 - Quote of the month – Stay invested!January 3 - What SARS Says About Crypto Assets and TaxJanuary 2 - Three Ways to Leave a Legacy, And Not Just an EstateJanuary 1 - Red-Carding the Myth of The Rational Investor