When it comes to relationships, money can be a contentious issue. Whether you are in a new relationship, moving in with each other or sadly separating, the discussion about money is always a tense one. Have you found this at any point in your relationship? What problems, if any have money matters in marriage caused for you? Although finances are one of the top primary causes of marriage breakdown, I am here to show you that does not need to be the case.
Now that you are reading this article, I can tell you that you are in the right place. Money does not have to cause arguments. Instead, it can increase harmony and happiness in a couple. How? Well, the simple answer is that we need to learn from our past. Be honest with ourselves, set realistic goals and improve our mindset. Read on for the best way to talk about money matters in marriage before it becomes money and relationship problems.
Money matters in marriage
It can be tricky enough managing our own finances. How to get out of debt, learning how to save and figuring out how to control our spending. Imagine getting to the point when you also have to be a part of someone else’s finances. To work out a budget that is consistent with two different salaries and to discuss each others financial habits without breaking into a fight. Well, its enough to make me break out into a sweat.
When to talk about finances in a relationship
Before you take that next big step in a relationship, you need to have ‘the money talk’. Arrange a time you can get together, in a quiet and non stressful environment. Grab a coffee, calculator, pen and paper, take a deep breath and relax. Remember, you are both there because you love each other and want to be together. So this conversation does not need to be antagonistic or defensive. Rather, see it as another way in which you can be honest with each other and move forward together.
Financial points to discuss
Below are a list of the main areas that should be covered in this conversation on finances. Once discussed, you will know more about each other and will have an understanding of where you both are, financially. This will enable you to put plans into place regarding how you jointly want your future to be and how to get there.
1. Do either of you have any debt?
If one or both of you have debt, there is a reasonable chance you may have a bad credit score. This adversely affects your chances of being able to make a large purchase such as a car or a house. Bad credit lasts up to seven years so this is something you need to investigate and talk to your partner about. Get your free credit score report on Experian.
Once you have established whether the other has debt, look at ways together to pay it off. Even if it is only one of you in debt, your partner should be supportive. Owning up to debt takes courage and shows a willingness to resolve the situation. Maybe he/she could curb their spending and save with you. Set yourselves a target date for paying it off and a celebration party. After all, being debt free is definitely worth celebrating and the money matters in your marriage will become positive ones.
2. What are your joint goals?
Hurrah, now you have no more debt! Now that you are debt free, it is time to start talking about how you would like to live your lives together. How do you see your future and is it compatible with your joint financial situation? This is when you talk about practicalities such as location to live, jobs, income and expectations. Expectations can consist of factors like children and lifestyle. Children are very expensive so if they are on your radar you need to both be on the same page when it comes to your salaries and whether they will support your future lifestyle. A very grown up decision that I am sure you are both ready for.
3. Is it his? Or mine?
When two people already rent or own their own homes, they most likely have all the material possessions they need. Moving in with a partner means deciding, between the two of you what you will keep and what you will do with the excess. What will happen with the money from items sold? Ideally, if you both have roughly the same amount from this, you could either individually keep it or jointly contribute to future purchases. With any large purchases made in the future, a good way to work out who will splash the cash is to pay according to your income. Which brings us neatly onto the next point.
4. Working out your incomes
Some couples do not know what the other earns. This may work for them but I feel honesty and transparency are best in a relationship. This also applies to the financial side of the relationship. Take your money matters seriously in your marriage. We have already established that this is an area that can cause tension so why not avoid it at all costs? Once you know each what the other earns, you can start a conversation about how you would like to manage payments for the mortgage/rent and bills. This is where that transparency comes in useful. If you were not sure of your partners salary, how could you decide what was fair? With honesty, you can break it down into exact percentages. Time to bring that calculator into play!
5. To joint account or not to joint account?
We all have our own bank account and hopefully a savings account. Your direct debits take care of monthly bills and your wage is paid into it. You are in control of your credit card and hopefully, everything is well organized. So what now? A joint bank account would disrupt this routine, wouldn’t it? Should you combine your finances before marriage?
Wrong! Like the point above, having a joint bank account can save you feeling resentment about how much each of you are paying for various things. Once you know each others salaries and calculate how much the two of you will contribute, percentage wise to the monthly bills, you need to decide the logistics of how these will get paid. You have a couple of options that are detailed here.
Option A: Joint Account
Firstly, you could throw all in and just have one joint account. My parents did that and it worked well for them. However, I would not recommend it. You wage is totally at the mercy of your partners spending decisions and vice versa. There is a total lack of privacy over any purchases you make and should you separate, you will then have to close this account, open separate ones and work out what to do with the money in the joint account. I don’t think this is a cynical approach, rather you gain some autonomy if your accounts are your own.
Option B: Separate Accounts
The main other, most popular option is to keep your own existing accounts and also open a joint account. Into this will go the monthly amount you have mutually decided you will both contribute. Out of this account will come your rent/mortgage and bills. Your salary will still go into your personal account. Then, the surplus income is your own. When you buy your husband a birthday gift, he will not know the price and will not feel like he has somehow paid for it. If you want to go out for the night, you can justify this spending yourself. This approach causes far less resentment and allows both of you to feel like you participate in the household spending but also have some financial freedom and independence.
6. Children and childcare
This one can kill relationships. From personal experience, I believe it best to have this conversation fairly early in a relationship. Not on the first meeting, you don’t want to make your date run for the hills. But a difference of belief here can cause a lot of arguments and financial resentment. The question for your partner should center around who will look after the children, should you decide to have any. Maternity leave in the UK is 9 months. But after that, the onus is on the parents to make this big decision.
Some couples decide one partner should stay at home and bring up the children. Sometimes both parents go back to paid work. Whichever you decide, it is a conversation to have before your relationship becomes too serious. From personal experience, this can build up a lot of resentment and cause heated arguments so it’s best to be on the same page right from the beginning.
Marriage can be fulfilling but is also a compromise
Your marriage/relationship is a partnership but aspects of it are also a compromise. This does not mean you have to alter your beliefs or lifestyle but when two people are merged, certain considerations have to be made. For example, if you love eating out a couple of times a week but your partner cannot afford this, discuss what is possible financially and stick to it. Maybe you could treat your partner sometimes. On other occasions, you could go out with friends without your partner. Just because you are now living as one, this does not mean the partner with the higher wage should pay for everything. Remember how quickly resentment can build. You need to work out a compromise you are both happy with.
“Rich isn’t an amount of money, it’s a mindset about how you live. If you believe you can win, you can“. Dave Ramsey
Money mindset is all about your relationship with money. The fact that it is even called a relationship shows the tight connection and high emotion that we humans associate with money. Therefore, it is highly possible that money can be a huge stumbling block in a relationship if we allow it to be.
Growth and fixed mindset
There are two types of mindset. If you have a fixed mindset, then you believe you are limited in what you can achieve, financially or otherwise. Consequently, you will not push yourself to achieve your or your partners dreams. If you have a growth mindset then you view money as a friend and see the benefits it can bring. You know that your capabilities can help your relationship thrive over time and that you will prosper together.
As a couple, you need to have the same growth mindset to succeed together financially. Whether one of you is in debt or if you have different incomes, with encouragement and a positive attitude, you can encourage and plan to improve finances. This will then lead to more options in your life together. By working together, with the same growth mindset and goals, your sense. of unity and togetherness will increase.
Love and money in relationships
Go into this new part of your relationship with an open mind. Whatever has happened in a previous relationship, only carry forward with you the lessons you learnt from it. And what you learnt about yourself. I do believe that a second relationship benefits from a first long relationship. Although you probably have not emerged unscathed, if you can let go of any bitterness then you will only prosper from what you learnt. Consequently, your new relationship should benefit.
So these are the questions you need to discuss with your partner/husband before you move in with each other. A growth mindset is the way in which you both need to approach this meeting and the attitude to have going forward. Once you have had this discussion, you can then approach the subjects of budgets and manageable goals.
Should we be sharing our finances in marriage?
This is a question that is answered differently by every couple. Do you want your relationship to prosper? For trust to build and have transparency on both sides? A certain amount of financial merging is crucial, for both partners to feel valued and important. However, it is also relevant that we feel safe should the relationship ever fail, so to also have separate savings is also sensible. A balance between the two is crucial to its success. Money matters do have a place in your marriage so treat it with respect. Let me know if you have managed to achieve this in your relationship.
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