How to Manage Finances in a Relationship: Tips for Couples

Money is one of the most common sources of tension in relationships. You might think that you and your partner will be able to make your finances work easily, but for many that is not the case. We all have our own ways of doing things, and with something as sensitive and personal as finances, it can be jarring if your partner doesn’t see things the same way that you do.

Financial disagreements are among the leading causes of divorce, so taking the time to talk about your financial expectations and make a clear financial plan is key to making marriage and money work. Whether you are newlyweds or have been together for years, discussing money matters early and openly can help avoid misunderstandings and financial strain further down the line.

How Should Married Couples Split Finances

One of the first big financial decisions married couples face is how to divide their finances. While some couples believe handling money in a set way is just common sense, the truth is that everyone has different habits, expectations and perspectives when it comes to spending and saving. Ignoring the topic can lead to resentment and arguments, so it’s best to set expectations early.

So, how should married couples split finances? Well, that depends on you and your partner – it’s all about what works for you, both individually and as a couple. Should you combine your finances, keep them separate, or adopt a hybrid approach? There is no one-size-fits-all answer, but understanding the good and bad side of each option can help you and your partner make the right decision.

Marriage And Finances: Should You Have Joint or Separate Finances?

The choice between joint and separate accounts can be a tricky one. Some couples believe that merging their finances is crucial to becoming a unit, while others prefer the independence of keeping things separate. Another option is a hybrid approach – the best of both worlds.

Joint Accounts

In marriage and finances, a joint account means that both partners have access to the same pool of money. This approach is best for couples who want to manage their finances as a team and be completely transparent in their spending.

Pros:

• Easier to manage household expenses and budgeting.
• Encourages teamwork and trust.
• Everything is equal, reducing the need for complex calculations on who owes what.

Cons:

• Large income disparities can lead to resentment if one partner feels they contribute more.
• Disagreements on spending habits can lead to friction.
• If one partner accumulates debt, it can affect both parties.

Separate Accounts

With separate accounts, each partner keeps their own personal bank account, and they decide on a fair way to split up shared expenses. This method is ideal for couples that want to maintain their own financial independence, for instance, if one of the couples has a poor credit history.

Pros:

• Each partner stays in complete control of their own money.
• No obligation to pay off each other’s debts.
• Less chance of arguments about personal spending habits.

Cons:

• Less sense of being a financial team and united front.
• Managing shared expenses can be more complicated.
• If one partner earns significantly more, this imbalance might lead to tension.

Hybrid Accounts - Both Joint and Separate Accounts

A hybrid approach can provide the best of both worlds and is ideal for couples who can’t decide which is the right way to go. It’s also often a good first step for couples – they can put all shared expenses in the joint account while maintaining control and autonomy over their personal finances.

Pros:

• All the benefits of being a financial team while still allowing personal freedom.
• Easier to manage household bills and savings together.
• Each partner keeps their sense of independence.

Cons:

• Differences in income can still lead to one partner having significantly more disposable income than the other.
• Strong communication skills are essential for this to work – you’ll need to regularly discuss your finances and agree on contributions.

Our Advice for Marriage and Money

Regardless of the approach you choose, having a solid financial plan is essential for both your marriage and finances. Finances are one of the common arguments couples have – you’ll need to be intentional and thoughtful in your approach. Here are some tips to help you navigate marriage and money successfully:

• Decide Who Pays What: Splitting expenses doesn’t always have to be 50/50. If one partner earns a lot more than the other, a proportional split, such as 60/40, might feel fairer. The important thing is to agree on a method that both partners feel comfortable with.
• Be Open and Honest About Your Finances: Transparency is incredibly important in any financial arrangement. Regularly discuss your income, expenses, debts, and financial goals to ensure you’re both on the same page. It’s also important to discuss life goals within the context of your finances – for instance, planning to have a baby or get married will both require a lot of financial planning.
• Make a Plan to Pay Off Debt: Debt can be a major source of stress in a relationship. If either partner has outstanding loans or credit card debt, work together to decide how you’ll pay it off. If you’ve got big life events coming up that you’ll need to take on debt for, like a wedding loan, discuss how you'll manage repayments as a couple to avoid future financial strain.
• Set Financial Goals: Whether it’s saving for a home, planning for children, or building an emergency fund, setting financial goals together will keep you both motivated, united and on financial track.
• Establish Ground Rules: This is a big one! So many arguments arise simply from couples not discussing ground rules when it comes to finances and other areas of a relationship. You should discuss spending limits, savings targets, and long-term financial plans. Setting clear expectations will help avoid conflicts and ensure financial stability.

Our Conclusions When It Comes to Marriage and Finances

There’s no black and white answer for how should married couples split finances. Managing finances as a married couple requires solid communication skills, the ability to compromise, and good planning. Whether you go for joint accounts, separate finances, or a hybrid approach, the main thing is to find a system that works for both of you. Marriage and money don’t have to be a source of stress – as long as you approach it with honesty and teamwork.

Don’t be afraid to revisit your approach as your circumstances change. The most important thing is that you and your spouse are aligned in your financial journey, ensuring a happy and stress-free marriage. At Fast Loan, we can help you and your partner make the right choice for your finances – it’s what we do. Contact us today to find out how we can help!