No matter if you’re in a serious relationship or have already tied the not managing money as a new couple can be tricky. Everyone’s situation and preferences are different, so there isn’t a one-size-fits-all- system.
However, there are critical do’s and dont’s that will help you avoid potential disagreements and create a great financial life. Keep reading for six money management tips that every new couple should follow.
Since every relationship is different, my first tip is to be realistic about the status of yours. If you’re close to getting married, or are 100% committed and feel certain that your union will stand the test of time, my advice for managing money as a couple is very different than if you’re really not sure if you have a solid future.
If you’re a committed couple, then your money should follow. Leap in and merge every aspect of your finances.
Uniting money with joint accounts is the best way to work and succeed as a team. Steer your future as a couple by deciding how to budget, how much to save, whether to buy a home, and so on.
When you’re in a committed relationship all financial decisions should be discussed and shared equally - otherwise you’re just living two separate lives under one roof. It doesn’t matter if only one person works, one earns much more than the other, or one brings more debt into the relationship. Love doesn’t keep score when it comes to money.
You will always earn more or less than your partner or spouse, and you’ll also have different amounts of expenses and debt at different times. The financial give and take in a relationship is never even.
There has been years where my husband earned double or triple my income, while I also incurred big expenses like graduate school. Likewise, there have been years when I was the breadwinner.
When you’re in a relationship for the long haul, both of your incomes, expenses, debts, and savings are yours to manage as a couple. So all income and expenses should flow through the same joint account.
Yes, that’s a lot of transparency. That’s the point. When each of you knows the truth about your finances it builds trust, fosters communication, and allows you to accomplish more together than you ever could alone.
However, I must repeat that if you’re not 100% committed, there’s no rush to merge money. You might choose to split household expenses - like rent, groceries, and utilities- down the middle, or to contribute proportionally based on your income usage.
No matter if you decided to merge your finances or not, there are some great financial tools that make managing money a breeze.
Try a free app like Mint that imports all your bank and credit card transactions into dashboard. It’s perfect for when you want to keep track of spending and simple goal setting on the go.
If you want a more robust product, I’m a big fan of Quicken desktop software. There are different versions, but the starter edition is just $40. It links to your financial accounts, imports transactions, and give you much more functionality and reporting compared to Mint.
Expenses you need to split up can be assigned to a special account like “joint household expenses,” so they’re separated from your personal expenses. At the end of the month you can easily see the total and settle up.
If you need to reimburse your partner, Pay