If you are finding it hard to communicate your financial needs to your partner, you’re not alone. A recent study showed that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about finances.
Financial literacy leads to a lifetime of freedom and pleasure but for some reason, our society has deemed it improper to speak openly about money. Perhaps we don’t talk about it enough because of the anxiety of what other people will think or because it’s just plain boring to some. For nearly all of us though, money had been a point of contention, anxiety, or stress at some point. Placing a focus on personal finance can put these negative feelings to rest. Let’s start talking about finance and create a more stress-free life for ourselves. I applaud you for reading this and for having interest in the topic, that’s step one!
Combining Finances in a Relationship
Managing money as a couple might seem daunting but I guarantee it will be rewarding. Justin & I like to think of our partnership as a team; we only win if we work together. There are many viewpoints out there on how to deal with finances in a long term relationship. I’ll explain my viewpoint as a young adult who is about to get married.
Justin and I did not start combining anything until we moved in together. At that point, he was excelling in his career and I had about $60,000 in graduate student loan debt and one year left of PT school. Our lives were far from equal but he never treated me inferiorly and that was a major green flag.
Most people think of combining finances in 2 ways: either splitting the bill exactly in half or taking an equal percent of the bill based on income. In reality, neither of these are truly “combining” because there is still a level of separation. What has worked for us is to essentially combine all of our income and expenses into one account that we share. We’ve been doing this ever since we moved in together a few years ago. This combining allows us a sense of equality in our relationship.
Just because this technique works for us doesn’t mean it’s perfect and will work for everyone. Justin & I are not immune to having arguments about money. Last month we had an argument when I wanted to buy a lash booster that was admittedly expensive. When I told him about the purchase he couldn’t understand why having this expensive product mattered to me. I’ve learned through our occasional disagreements that men and women value totally different material goods. Justin doesn’t understand why I buy makeup, but why would he…he’s a dude. That being said, I still buy what I need and it comes out of our shared account and he hardly says a word….unless I’m spending $130 on a lash boost, lol.
Side note: I totally got scammed on that purchase and couldn’t even use the lash boost we fought about.
How to Start a Financial Conversation
- Be honest and tell your partner that you are interested in understanding your combined financial situation. If you are planning on getting married or are in a long lasting relationship this matters for your future.
- Ask each other what your financial goals are.
- Maybe you want to pay off your student loans within the next 2 years or potentially your partner’s goal is to max their 401k this year.
- If you don’t have financial goals yet, that’s totally fine. Most young people don’t set financial goals but I would begin to put some thought into this.
- Understanding what the two of you want in the future is important. Assess what budgeting, saving, and investing you might need to do to achieve the goals you set in part b above.
- Throughout the conversation remember this: if you’re in a long-lasting relationship you should want the best for each other. Now I understand there is a risk involved with combining finances prior to marriage but if you’re romantically involved with someone who is loyal and honest, you shouldn’t be too worried.
- Justin and I were together for 4 years when he decided to help me pay off my graduate student loans. At this point in our relationship, although we were not engaged, we had a strong loyalty to each other. We both felt comfortable with this decision knowing this would be better for our financial future. He was helping to pay off what would become our debt.
When is the Best Time to “Combine”
I believe the best time to combine is shortly after you move in together. As I write this article, please know that I understand everyone’s situation is different and this might not be physically possible for some. I realize that some people need more time, need to think about it more, and build more trust in the relationship. That is all okay and just consider this blog as food for thought in that case.
When you move in together a lot of “shared” expenses are created: rent, utilities, cable/electric, pet visits, and groceries just to name a few. Let’s remember here, this individual is not just a roommate. This is your life partner, the person you will hopefully spend the rest of your life with. The only way to test the waters of marriage is to act like a married couple.
I’ve really liked combing all our income into essentially one account. I think it helps to form trust and an honest financial relationship.
I was recently talking to a friend who had a concern about economic fairness. She told me she made nearly 3x as much as her partner and she didn’t believe it was fair to combine their income into one account. On the surface, I agree, and this makes a lot of sense but there’s clearly an underlying issue leading her to not want to combine with him. She eventually confessed that she was apprehensive due to his spending habits.
This is something the two of you should talk about prior to combining. You never want to be resentful of your spouse or partner because of money. Whether or not you decide to combine finances, don’t you think it’s healthy to know what your partner is buying? Outside of gifts, you should not be hiding anything from each other. If the sole reason to not combine is fear of your partner seeing your purchases, then that might be a fundamental issue within your relationship that should be taken care of first.
Justin and I usually inform each other first before making a bigger purchase out of fairness. Let’s be clear, this communication is not to get our spouses approval but out of courtesy and fairness to the financial relationship.
Justin is great at excel and making spreadsheets so he enjoys tracking our income, expenses, and investments each week. We personally do not budget but think it is important to be aware of cash flow. Every single Sunday we sit down together and review this. We don’t obsess about each purchase but we do like to look at broad spending trends. This is a good exercise for us as we are occasionally surprised at how much we spent. This is a great time to have an open financial conversation, ask questions and get clarity with each other.
Protect Yourself and Set Boundaries
Now it’s time to have an honest conversation with yourself. Is your partner one who envisions a successful financial future, who supports, and cares about you. Pay attention to your partnership. Take off your rose colored glasses. Assess your partner’s reaction when you want equality. If they act resistant to equality then realize that is a major red flag. Your partner should never want you to be dependent on them. That is not love; its control, manipulation, and power. Our partner should always empower us to be the best version of ourselves and give us choices! Finances is one of the major reasons women don’t leave toxic relationships. You want to protect yourself financially and that means having these tough conversations sooner than later.
Questions? Concerns? I really think this is such an important topic and would love to know how you and your partner deal with finances. Let me know your thoughts below. For more blogs on finances, click here.