Money can often be an awkward subject to broach with a partner. However, it’s one that is so important to the longevity of a successful relationship. As someone who’s currently in a long-term relationship with someone in a very different money situation AND lives with their partner, I thought I’d share what has worked for me for how to deal with money in relationships.
1. Talk about money early on
The longer you wait to talk about money the more awkward it gets. When my boyfriend Jacob and I first established that we were official, I was very upfront about being on a debt-free journey. Jacob, in return, was honest about his finances, debt and general money plan, since he was in college at the time.
Don’t wait till you’ve moved in or gotten married to talk about your finances.
Money issues is one of the leading causes of divorce and it’s likely related to people treating the subject as taboo and then having a nasty surprise when they find out they are financially incompatible.
2. Know when to be financially transparent
Since Jacob and I live together, we are very transparent with our finances because we split our bills. Communication is key when you start to divide up bills.
If there is an income discrepancy, you may want to discuss a different bill split than 50/50 as to not cause undue stress on one party. What is fair to you and your partner is completely up to you, but be as open as possible about who is going to pay what, for how much and how you’ll share expenses on bills, irregular expenses like eating out and things like vacations.
Being quiet about not feeling great about how costs are shared is a first class ticket to money fights, discontentment and resentment.
How my partner and I handle this
Personally, Jacob and I don’t have any shared accounts and I wouldn’t want to take that step until we get married.
Even then, we’ll likely keep some private accounts in addition to having a shared one. This isn’t to hide anything, but just so we can spend freely with our personal expenses without having to “run anything by” the other. I’m sure we’ll set an agreement to check in with the other when making large purchases, but as long as we’re splitting shared things fairly and both contributing to our shared and personal goals, I don’t see the need to completely merge.
I also have access to his budget (mostly because I set it up for him), but I haven’t looked at it in years. It’s unnecessary because we regularly discuss money, I have an overall idea of his situation, and trust he’ll talk to me if his money is tight, something major comes up, etc. I also do the same with him!
When Jacob and I first moved in together we realized that we did and bought different things. For example, salad dressing and several condiments! I usually buy store brands but Jacob is super brand loyal on a few things. This was a silly and easily fixed, but compromises will need to be made on larger issues as well.
Where does the majority of your/ your partner’s post-living expenses discretionary spending go?
If one partner values spending money on travel and saves for trips that he or she wants to go on as a couple, but the other partner prefers to spend on video games, or another activity that they do alone, that may cause negative feelings between partners as one is funding “together” activities and the other isn’t.
A similar situation could play out if one person has a lot of debt and/or doesn’t value saving money for the future and the other is debt free or is working toward bettering their finances/ saving for a home or other goal they will need support from their partner on as they sacrifice to reach that goal.
These individual choices going in and going forward affects shared money scenarios will need to be discussed to avoid discontentment. It it totally possible to support each other and work together to make sure each partner can spend based on their values, but that is impossible without honest communication and compromise.
4. Financial goals
When you’re in a long-term relationship then you’re bound to talk about the future and what each of you wants that to look like. For us, I knew that Jacob had a big long-term goal to pay off his student loan debt. For me, that meant I would need to support him in that and not encourage him to take me out on expensive dates, eat out and that we likely couldn’t do a lot of expensive travel. All things I was happy to do to help support him as he works toward that.
On the other hand, he knew I wanted to buy real estate and become a landlord, which meant moving every couple years, running out on late night repairs, etc. He’s helped a ton with these types of things, which has saved me lots of money on handymen and service calls as he’s naturally skilled at unclogging, fixing thermostats and muscling things I can’t.
Understanding where your partner is in their financial journey is key so you can plan for both your futures.
You’ll figure out if your financial goals are compatible, saving yourselves a lot of money, time and heartbreak from if you were to find out far down the road.
5. Daily couple expenses
When it comes to things for the house, and basic living expenses, we shared the costs equally when we were renting. We also have an understanding that if Jacob bought us breakfast then I’ll pay for dinner later that week, trying to share the costs of dates as evenly as possible without tracking every penny.
Now that I own a home, we had multiple honest discussions on what was fair when it came to the new split on bills. Would we split the household expenses for the home I owned equally, including anything that comes up (like a new roof, fridge, flood etc?) or would we set a rate he could afford similar to our old renting expenses where he could anticipate how much to pay? We discussed pros and cons of all options and eventually landed on him paying me a set rent and I handled all pop up homeowner expenses. He even has a lease!
Read more about that here.
We’re both happy and secure in this arrangement and that is the most important thing as a couple. You have to feel good about how you work together. PERIOD.
Hear from Jacob and I talking about how we handle things, especially as a couple in two different places on our financial journey.
DISCUSS: Let me know if you have any golden rules or tips for how to deal with money in a relationship.