Managing your money well can already seem stressful enough when you’re single. And it is perhaps even more complicated when you are in a relationship.
We often imagine the discussions around finances in the couple as a subject of shouting match.
But that doesn’t mean it’s a subject to be avoided at all costs. On the contrary: still too few couples have open and deep conversations about money. And this is precisely where the problems begin.
It is this very lack of communication and planning that is the root of many problems.
And when we talk about learning to manage your money as a couple, the question is not only whether you will take a joint account and at which bank.
You will need to work together to develop a system and strategy that makes both of you feel comfortable, protected, and equipped to put your money to work for your purposes.
The questions to ask
How are we going to allocate our expenses?
This is often one of the first questions we ask ourselves: the pooling (or not) of expenses.
There are several ways to divide your expenses as a couple. And the opinions in favor of one method or another are sometimes very clear-cut.
On one side you have those who tell you that you should share everything. Accepting other people’s expenses without flinching, a smile on your face and butterflies in your stomach. Because we’re talking about love, and money has no place in it, right?
On the other, you have those who tell you that if you don’t separate your expenses completely, you are being naive. ” 50% of marriages end in divorce, so you might as well protect yourself so you don’t regret it later “.
So who is right?
In reality, everything depends on the situation of each couple, their values, their desires…
And the truth is, there is no right or wrong method . The right method is the one that works for you and your spouse.
Personally, I am married under the regime of separation of property. We each manage our finances on our own, with of course several common projects for which we set aside together. But everything is separate.
And it works perfectly well for us. But that’s not why I would advise everyone to do the same.
None of the options is better or morally superior to the others. Just know that there are several possibilities, and it’s all about finding the one that suits you both.
And even if it means having to change along the way, as long as you make the decision together. Either because you realize that this system does not work for you, or in the event of a change of situation, such as the loss of a job for one of the two spouses.
The different ways to divide your expenses as a couple
The two main strategies are:
– You share all your expenses
All your mandatory expenses and your pleasure and personal expenses are shared, and financed from the same common pot.
You will therefore generally have a joint account in which you will both deposit your salary (if you are two to work), and from which you will pay your expenses.
If you follow this strategy, don’t forget to also organize your savings and investment accounts (do you also share them? How?)
Another advice I can give you if you decide to share all your expenses: set together a limit on the amount of what you can buy beyond which you will have to decide on this purchase together.
For example, for an occasional expense of more than €300, you will have to discuss before and together this expense and its relevance. The goal is to avoid conflicting situations that could come from unforeseen expenses that the other feels “forced” to accept.
- Easier to manage on a daily basis (no refunds to be made)
- Easier for the administrative management of certain files
- Both partners can get an overview of the couple’s expenses and financial situation
- Less independence
- Source of conflict and resentment often greater
- Problem in case of separation
- – You separate all your expenses (excluding common living expenses)
- Here, you only share mandatory expenses (rent, bills, charges, shopping, etc.) and those related to your life together (furnishing the apartment, etc.).
- Personal expenses that are not related to the life of the couple are taken from the personal budget of each, who therefore uses the rest of his salary to pay for them.
- Honestly, this method is often seen as more complicated than it is. Today there are many applications that allow you to share your expenses and track your reimbursements.
- You can also very well have a joint account for your common expenses, on which you will deposit each month the exact amount which will be used to cover the obligatory expenses – and keep the rest on your personal account.
- If you decide to separate your expenses, also ask yourself the question of the distribution of the payment of common expenses.
- We often take 50/50 by default, but this is not necessarily the method that will work the most for you.
- You can very well decide to distribute your common expenses according to the % of each person’s salary. That is, whoever earns the most contributes the most, and vice versa.
- Again, do what feels right to you both.
- These two scenarios are the most common, but of course you can adopt any other tailor-made technique to manage your expenses.
- In any case, plan a one-on-one evening to discuss these topics openly and in detail.
· Should we take a joint account?
- Already, everything will depend, as we have just seen, on the strategy you have chosen to distribute your expenses.
- If you decide to share all your expenses, having a joint account will be much easier to manage.
- Both of you will be able to access your money when you need it, knowing that joint accounts allow you to have a bank card and a checkbook each.
- Both of you will also have access to the online banking area of your account, which can make it much easier to pay bills and share financial tasks.
- Also, one of the big advantages of the joint account when you share your expenses is that both partners can keep an eye on the account and on the transactions carried out. This avoids unpleasant surprises, and facilitates budget management.
- If you decide to manage your expenses separately, a joint account is a little less essential but can still be useful.
- In particular, it can facilitate the payment of common expenses. All you have to do is calculate the total amount of mandatory expenses that you will share per month, and divide this amount according to the distribution you have chosen (50/50 each, according to the % of your salary, etc.)
- Then, each schedule an automatic transfer from your personal account to this joint account at the beginning of each month, after receiving your pay.
- All direct debits of your joint invoices will therefore be scheduled on this account.
- Pay attention, however, to the date on which the invoices will be debited to prevent them from being debited before your transfer has arrived, in which case you risk being overdrawn.
- Better yet, leave a small extra amount in the account to limit risk.
- But you can also function very well without a checking account.
- On our side, it is my husband who manages the bills, and everything is debited from his account. Then, I programmed for each beginning of the month an automatic transfer to his personal account which corresponds to my share to be paid.
What are our projects?
I speak very often about the importance of setting your goals .
Because that is, basically, the main reason why we want to save: to carry out our projects . As well as providing financial security (such as building precautionary savings , for example).
And these two elements are just as important when you are in a relationship.
Because we find ourselves with two aspects to balance: personal projects, and couple projects.
Often, we think that because we are with someone, we already necessarily know everything that he really wants, and that we know his opinion on everything.
In reality, many such deep conversations are too often ignored. Even important conversations like whether or not you want to have children often come up quite late in a relationship. Which of course can cause problems.
Because if one of you aims to go live abroad in a few years, and the other to buy a main residence in France, there may be a problem.
In short, your financial goals are to be defined . And this both as a couple and as an individual.
Take a dedicated time (not on Sunday noon while cooking the lentils and sausages) to seriously discuss with your partner your desires and your projects to define your action plan together.
Then you can decide how best to manage your money and set aside to achieve those goals.
How do we prepare for emergencies?
Creating a solid financial base to deal with the unexpected is one of the basics of personal finance.
Without an emergency fund, you become completely vulnerable to the unexpected. Every financial emergency (an appliance that breaks down, a car that needs fixing, or worse, the loss of a job) puts you under significant financial stress, and you may have to fall into debt to get out of it.
That’s why you should actively work to set aside at least 3-6 months of expenses, just for your safety savings.
And if you are in a relationship, it is a plan that you will have to build and organize together.
Things to keep in mind
We were talking earlier about planning a time with your partner to discuss your projects and goals together, and how your finances can help you achieve them. Or to define how you will distribute and manage your expenses within your couple.
But the trick is to have this discussion once, and then not talk about it again.
Because as the months pass, your expenses, your income and your goals can also change.
That’s why it’s important to rest together regularly to make sure your financial plan is always on track.
For example, you can have a small meeting a month, in your favorite bar or café.
If you’re budgeting together (which I highly recommend), try to schedule at least one “money date” per week during which you’ll make sure you’re still on track with your budget for the month.
No need to spend hours there: a few tens of minutes are generally more than enough
Share the responsibilities
Managing your money as a couple is not just about having a little chat from time to time, but with a single person in charge of everything related to your finances.
You have to work together, and therefore also share responsibilities.
This is of course not always the case, but often, we will find in couples one person who is more comfortable with financial planning than the other. This person may be in charge of the more “technical” part of the budget, but both must absolutely have a say in how it is constructed.
And even worse: if you don’t clearly define who takes care of what and how you will work together, you risk overdrafts, unpaid bills, and projects for which you never set aside (and which therefore never become reality…).
Approach topics with empathy and love
Managing money as a couple can be tough, but it doesn’t have to be a constant hassle.
The key is to keep communication open, honest and frequent on these matters to avoid problems and misunderstandings that lead to arguments.
Most importantly, remember that financial education is a process, and you are both learning.
Also show empathy, and keep in mind that the other did not grow up with the same relationship to money as you.
If a situation bothers you, approach the subject in such a way that you understand how the other person works and what you can do to make it more pleasant for both of you , rather than trying to criticize the way they work.