Money is one of the trickiest topics to navigate as a couple - whether it’s how you split the bill on your first date, to what ratio of your salary goes into the joint account. It can be hard to talk about, and that can lead to tension. With this in mind, we asked financial advisor Emmanuel Asuquo, founder of the Eman Effect, to share his top tips for merging your money as a married couple…
Money is already a sensitive subject for some, so when it comes to managing money in relationships, it’s an even more delicate topic as there are more emotions involved. Money can also be quite private, so people tend to shy away from discussing it.
However, it’s essential for couples to have conversations about money because if not, how will you decide who pays the bills or how you will buy a house together?
When not discussed or managed correctly, it can have a devastating effect on the relationship. With the cost-of-living crisis, issues with rising heating bills, petrol costs, and the list goes on, conversations about money management are unavoidable in this current climate.
I hope these top tips can go towards helping couples feel more confident about managing their money and working together as a team.
How to Manage Money in Your Marriage
Too many times in relationships, people don’t have conversations about money because they think it’s too personal. But money is a significant component in a relationship. You need to be completely honest when discussing your finances; otherwise, this could cause problems later in your relationship.
Some topics you should discuss should include your spending habits, your relationship with money, any debt you may have, your financial goals and maybe even any fears or concerns you have concerning money.
This conversation will ensure you are both on the same page, especially if you have joint financial goals, for example, planning/saving for a wedding. It can be pretty upsetting if one person is saving and the other is spending.
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2. Create a Budget
Understanding and managing your money as an individual is vital before managing it as a couple.
You should have a good idea of your personal spending habits (which is a conversation you should have with your partner). Then when you’re creating a budget together as a couple, you will know each other’s approach to money, and the budget will be tailored to both of you.
You should also have wiggle room while budgeting for unexpected emergencies. You could decide to have an emergency savings pot for this and discuss the type of emergencies that would warrant using it.
3. Have Joint and Separate Accounts
Having a joint account for bills and household finances can help a couple stay on top of their spending and ensure the costs are evenly shared.
I usually recommend a split based on their individual income. So if you earn significantly more than your partner, you split it accordingly. For example, my wife and I do a 70/30 split, which ensures that my wife has money left over for her personal spending.
If we were to go 50/50, I would have money left over, and my wife wouldn’t. This approach is also beneficial as it ensures the mortgage/rent, groceries and bills are taken care of and gives each person freedom for their own individual spending - the best of both worlds. Joint accounts also make budgeting a lot easier.
4. Share the Load
One person should not be in charge of managing the finances. If one person makes all the financial decisions, it can cause stress on the person and strain on the relationship. Instead, both partners should be involved in making financial decisions and aware of the current financial situation.
Having regular discussions to review your finances and spending habits is a great way for both partners to remain in the know about their finances. Being on the same page with your finances should lead to you working as a team, and if anything were to happen within the relationship, either partner could step in and cover.
5. Be Open About Credit
Talking about credit can be uncomfortable, but it’s a much-needed conversation to have. Discussing each other’s history with credit, how they view credit, and their current credit situation is very important.
Credit is an integral part of our lives, so it’s essential to have a clear picture when preparing for expenses and long-term planning like buying a house, upgrading to a bigger car, etc.
There is no exact way to manage money in a relationship. Instead, I will recommend keeping communication lines open, working towards a common goal and being open and honest with each other.
Ready to have a big conversation now? Here are the key things you need to discuss before marriage.