Money in relationships
Money, and how to manage it, comes up time and again as the main source of argument between couples.
You might think it’s a simple issue. Money in has to be greater than money out – easy. But then you’re listening to a personal finance podcast and your partner probably isn’t.
The key is that everyone has different approaches to money – even about what money means to them and what it’s for. You may regularly row about money, or there may be seething resentments. So ask yourself some questions.
First, establish what your separate attitudes towards money are. In the western world we broadly take three views – that it’s for enjoying, for security or for sharing.
It will help to get a piece of paper and a pen before you start this exercise.
Be warned though – if your partner hates the whole idea of discussing money you need to ensure they are in a good mood first.
They may even mock you for being too bothered about money. That in itself is a classic evasion technique!
Broaching the subject over a meal or decent bottle of wine (with you picking up the tab) is a good idea!
Ask yourself first then whether you feel comfortable talking about cash?
Do you have separate bank accounts? This can be important for couples wanting to maintain a degree of independence, but it can make budgeting a nightmare.
Have you established who pays for what? It can make sense to have one person who pays all the bills, but it can also stop the other person taking responsibility for their finances.
Gender roles and tradition come in here. Many of us simply do it the way our parents did. But there’s no point having the disorganised partner regularly forgetting to write the cheques – so play to your strengths.
Do you and your partner have a proper monthly budget worked out – one that covers all the regular bills AND allows some cash for fun?
Is that budget covered by your joint monthly income?
Come to that – do you KNOW what each others’ monthly income is! A surprising number of couples don’t.
Are there any nasty surprises? Credit cards, debts or loan agreements that you haven’t told each other about? If so – get them in the open and start paying them off.
Do you both know your net worth? Start by noting all your property, investments and savings, minus your debts.
Does one of you save and not the other? This can be a lingering cause of resentment.
What is your financial dream? If this question causes a blank look from your partner then you REALLY need to do some planning.
But most of us, if pushed will say ‘financial security’ or ‘early retirement’. Do you have the same dreams?
It’s alright if you DON’T of course, but you have to ensure your respective goals aren’t in conflict.
Have you planned for the future? A monthly budget is just the start. What will happen if you lose your job, have children, or split up?
Uncomfortable questions some of them. Be prepared for some shocks – this isn’t simply about turning your partner round to your way of thinking about money. You may discover that you aren’t perfect either.
In fact, if you have money arguments … Good! At least you’re talking. Most couples who get into money trouble stumble in unawares, because they found it too uncomfortable to broach the subject.
You’ll find a wealth of good information on money and relationships. TV money expert Alvin Hall has a number of excellent books, and I’d especially recommend ‘You and Your Money’.
I’ve also put links to some very good questionnaires and features on managing your money and your relationship on our website at http://walletwatcher.btpodshow.com.
