Couples' finance: how to avoid arguments about debt, spending, savings and more
Money is just one of those things that sparks fury between couples. Follow these tips to keep financial harmony in your relationship.
Money matters like debt, spending and saving can cause some of the fiercest arguments between couples.
Many people are not upfront with their partners about earning and spending habits, which can put an enormous strain on a relationship.
In extreme cases, financial problems can be enough to sound the death knell for an otherwise happy marriage.
But there are ways to avoid becoming another statistic in the divorce courts. Here are eight tips for maintaining matrimonial harmony and helping to stop your love affair dissolving into rows and recriminations.
Be honest with yourself
You need to know what type of person you are when it comes to your finances, according to psychologist Corinne Sweet, author of Stop Fighting About Money. For example, do you put money away or go on mad buying sprees?
“You may be a spender, a saver, a gambler or an ostrich that doesn’t want to look at their bank and credit card statements,” she says. “However, you really honest with yourself about these money patterns.”
Discuss your views on money before moving in
It remains a taboo subject for many couples but discussing how best to run your financial affairs as early as possible will save frustration and anger further down the line, according to Sweet.
“If you want your relationship to last then be open about your finances,” she says. “People would rather talk about sex than money but they make a mistake in not talking about it when they’re first getting together.”
Important issues to cover include the debts each partner has to their names, if they have any outstanding loans or credit card debts, and whether they are paying child maintenance to previous partners.
Have a joint account
There is no right or wrong way for couples to run their finances as long as they both fully understand how it works, what they’re responsible for and what they can spend, according to Patrick Connolly, a certified financial planner with Chase de Vere.
However, it does make sense to have a structure in place. “A common approach which can work very well is having a joint account from which ongoing bills and expenses are paid,” he suggests.
A joint account will provide transparency and ensure both partners know exactly how much needs to be paid in every month to cover household bills and keep a roof over their heads.
Find the right joint account for you and your partner at The best joint bank accounts in the UK for bills, earning interest and rewards 2016.
Agree how much each partner will contribute
This can be tricky. If both partners earn the same, then a simple 50-50 split makes sense. However, it’s more likely that one person will be earning more and be expected to shoulder a higher percentage of the costs.
The best advice is to agree an affordable split, whether that’s 60-40 or 70-30, so both partners feel they are contributing, yet also have their own cash and some semblance of independence, points out Connolly.
“Finances can cause arguments, particularly if one partner feels the other isn’t pulling their weight or is spending too much money,” he says. “Both partners understanding how their finances work will reduce this likelihood.”
Put together a viable budget – and stick to it
Life is expensive so you need to know exactly how much is needed every month to cover essentials such as the mortgage/rent, utility bills and food. An analysis of where your money has gone over the past three months can give you a good idea.
You can then expand the budget to include non-essential items, such as satellite television, meals out and hobbies. This will make it clear how much you have to spend on different items and help prevent you getting into debt.
Open up separate accounts
While joint accounts work best for many couples, lots of people prefer to keep some parts of their finances separate and have their own current accounts as well, says Connolly. “It means each partner can spend their own money without repercussions.”
As long as both couples have agreed how much is to be deposited by each of them into the joint account there shouldn’t be a problem. It also avoids questions being raised every time a magazine, manicure or drink in the pub appears on the joint statement.
Setting up rainy day funds
It’s also worth setting up a joint savings account – especially if you both want to put money away for a holiday. Having some money set aside in case of emergency also makes sense, suggests Justin Modray, founder of Candid Financial Advice.
“It’s a good idea to build up a so-called ‘rainy day fund’ through life to reduce the risk of large unexpected bills crushing your finances,” he says.
Ideally, you should be looking to put away at least three months’ salary.
Keep a constant dialogue
You must revisit your finances regularly to ensure all the bills are being paid, you’re not running into debt and the arrangement in place is fair to both sides because issues will arise from time to time.
For example, will the money to pay for nights out together come from the joint or separate accounts? How will you pay for birthday or Christmas presents? Who foots the bill if something unexpected happens?
Just be careful when you have these chats, advises author Corinne Sweet.
“The top tip is not to discuss money when you’re drunk or tired,” she says. “Talk about it on a walk or around the kitchen table – but have a time limit as it may become heated.”
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