How couples can manage money together

As January fades and February blooms, we're going to turn our attention from basic money management to something much more complicated: how money affects our relationships.

In December 2016, Bloomberg published a piece that profiled seven different couples from around the United States. The article — which was essentially a series of short interviews — offered a quick glimpse at how other people handle money in their relationships.

Here, for example, are Rebecca and Ari discussing what it was like to move in together:

Rebecca: So I moved here to be with him, was broke, and was accepting this big loan. But you were like, “I'd rather you owe me the money than owe the credit card company.” I was really impressed by that but also scared, because it was like, “What if we break up?” It definitely felt fraught. But I did accept the loan.

Ari: I mean, I loved Rebecca, and I just really hate credit card companies.

Rebecca: We had totally different relationships to money. Ari had been saving for retirement since he was, like, 17. He had this whole system of personal finance, and I had: Money comes in, money goes out. I think I felt embarrassed that Ari was this unbelievably responsible person.

Some of the highlighted couples have high incomes — over $100,000 per year. Others are barely scraping by. (One couple makes $24,000 per year; both partners work at Wal-Mart.) Some struggle with debt. Others are saving to pursue entrepreneurial dreams. But they're all discovering how to navigate the murkiness that can come when two people decide to join households.

Here's the couple that works at Wal-Mart:

Renée: I get a little frustrated at him. Sometimes I get a little bit surprised that he did that when I told him, “Not right now.” I've got anxiety over money. I do.

Matt: I do want to go back to school or get a second job. But what it does to you to work that much, I'm afraid I'd be gone all day. My wife would not see me. By the time I got home, it would be too late at night. I'd be way too tired. Not being able to come home, sit down, and say, “Hey, how was your day?” and all that?

Money management is tough enough when you’re on your own. Throw a romantic partner into the mix and things get more complicated! The best way to balance love and money is to maintain clear lines of communication.

Talking About Money

Reading through these conversations reminded me of a 2009 New York Times article in which Ron Lieber argued that couples need to talk about money early and often. Lieber says that couples should discuss the following four subjects before marriage (or before entering into a long-term commitment):

  • Ancestry. What does you money blueprint look like? What did your parents teach you about the meaning and value of money? How your family handled money has a huge influence on your own relationship with the stuff. If you and your partner have drastically different approaches to personal finance, that can cause friction.
  • Credit. It doesn’t sound very romantic, I know, but partners in a committed relationship ought to pull up their credit reports and credit scores together and discuss the results. This isn’t a competition. It’s a way to be open and honest, and to see where your team has strengths and weaknesses.
  • Control. Before marriage, decide the household financial structure. Who’s responsible for which bills and which accounts? Will you have joint or separate finances? Will one person operate as the Family CFO, or will you share the duties?
  • Affluence. Finally, be sure to discuss your financial plans and goals. As a couple, how wealthy do you want to be? Are you interested in early retirement? What are you willing to sacrifice to get there?

As you have these discussions, don't get emotional. Stay calm and collected. Remember that your goal is to manage your household finances like a business. If you, as a couple, don't like how your business is running, then agree to make changes. But make the decisions together, as a team.

The Importance of Teamwork

You'll always have some financial goals that don't align with your partner. That's fine, but put shared goals first. No matter whether your finances are joint or separate, make sure your common objectives are met before pursuing personal passions. Put the team before the self.

Here are a few ways to ensure that both partners are on the same page and that nobody ends up feeling like the bad cop:

  • Regularly review accounts. I believe it's important to set aside a specific time and location to manage your money. Some couples do this weekly. Others do it once or twice a month. At each session, look at upcoming income and expenses, and deal with any unexpected budget items. Regular reviews will keep you headed in the right direction while also allowing for minor course corrections.
  • Don't be controlling. Remove “you” and “I” from budget conversations. Replace them with “we” and “us” instead. Each partner needs to feel like they're involved in the household finances. If you unilaterally tell your husband he can't spend money on his motorcycle hobby, he's going to be resentful. If your household is struggling to make ends meet but you won't let your wife work outside the home, you're handicapping your budget unnecessarily.
  • Be supportive. Work together to achieve shared and separate goals. If your husband asks you to call him out on his bad behavior, do it. If he wants advice, give it. But don't lecture and don't be condescending. Be a partner, not an adversary.
  • Play to your strengths. Some folks aren't interested in crunching the numbers. They don't care about bank balances, interest rates, or the Dow Jones Industrial Average. Others don't like the day-to-day nitty-gritty stuff, such as clipping coupons or shopping at sales. Let each partner handle the stuff they're good at.

It's rare that a couple will agree completely on how to handle their money. The key is to find as much common ground as possible, and to find ways to compromise on the rest.

Note: It's vital for both partners to know what's going on with the household budget. Over the past decade, I've heard too many horror stories about what can happen after a partner dies or asks for a divorce. All too often, the other person is left with no clue how to handle the household accounts. (In fact, I think a Money Boss reader is currently working on an article about this very subject.)

Do What Works for You

When I was married, Kris and I kept separate finances. In the 23 years we were together, we never once talked about merging our accounts. For us, for who we were at the time, it just didn't make sense. This made a lot of my Get Rich Slowly readers tense — they felt as if failing to join finances somehow showed lack of commitment — but the system worked for us. We never fought about money.

I've been with Kim for almost six years now. We too keep separate finances, but we've also combined money in ways that Kris and I never did. Before our fifteen-month RV trip around the United States, for instance, we created a pooled account into which we could both save. And in our day-to-day lives, we each take care of expenses as we see them without splitting the cost with the other person.

Neither of these methods is better than the other. Each is right for its particular relationship. For me and Kris, it made sense to keep things separate. For me and Kim, it works better to merge some stuff. If I were with somebody else, maybe we'd pool our money completely.

I just don't think there's any one right way to do this. The “right” method is the one that works for you and your partner, the one that keeps your relationship strong while allowing you to pursue your purpose.

Your Turn

When I first read the Bloomberg article profiling how couples handle money, I shared it on Facebook. Each person who commented had a different way of handling money in their relationship. Some kept separate finances; others had joint accounts. Mostly, people seem to use some sort of hybrid system.

For instance, Lauren and her husband do both joint and separate finances:

Facebook comment about couples and money

Or there's Lane and his girlfriend, who also use a sort of combination system:

Facebook comment about couples and money

But I think my favorite comment came from Stephanie, who manages the household like a business:

Facebook comment about couples and money

What about you? What system do you use? How did you arrive at this setup? Did you try other systems first? Do you have regular household budget meetings? Do both you and your partner know how to handle your household finances? Do you keep joint accounts or separate accounts? Some combination of the two? What do you wish you did differently?

More about...Relationships

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Jason@WinningPersonalFinance
2 years ago

At this point my wife and I have everything combined and it works great for us. When we first got married we had both joint (for household stuff and joint activities) and separate accounts for individual stuff.

Both worked great. I do think having joint accounts helps us work better as a team to achieve our goals. For example, if one spouse is paying off credit card debt and the other is sitting with a pile of cash in a low interest saving account it’s highly inefficient. Combining finances helps a couple streamline their goals and savings.

michael
michael
2 years ago

I am most like the Stephanie person quoted above, and could not do it any other way. We have joint accounts and have had them since day 1. I am in charge of the investments/retirement and my wife is in charge of the day-to-day finances/bill pay. Where there are bills that are in my name (ie accounts that were opened before we were married), I wait to pay them until she tells me to as she knows whats going in/out of the bank account. Almost all our accounts are with the same investment company so, where we have individual accounts… Read more »

BusyMom
BusyMom
2 years ago

We have joined finances, and that is sometimes good. Sometimes not so much. Being the frugal-er one, it sometimes irks me when he throws away good money. However, it is not so bad in general.

We met when we were 18, and since then, “grew up” together. I don’t know if that made things easier.

Dave @ Married with Money
Dave @ Married with Money
2 years ago

We are combining everything right now. Later today we’ll finally switch my wife’s direct deposit to go into the account we’ve deemed as our shared one (which I’ve had for years). My thought is: we signed up for marriage together, as a unit, working toward the same goals. It doesn’t make sense to me, with that in mind, to keep things separate. Combining will let us plan more easily, and overall just simplify things as we move toward a shared, single goal. That being said we do still keep ‘fun money’ accounts for the time-being. $100/month, nothing crazy. She gets… Read more »

Little Miss Fire
Little Miss Fire
2 years ago

fab post. My partner and I combine money (which is good as I currently dont earn any) it can mean its harder for me to speak up about going over budget as I feel I have lost the “right” too as it isnt my money anymore.

Adam
Adam
2 years ago

My wife and I opened a joint account just before we got married. Our paychecks direct deposit equal amounts there toward day-to-day expenses (mortgage, groceries, anything and everything that we do together). We also each max out our 401(k) accounts; I deal with investments, rebalancing, and tracking. I’ll occasionally drop some tidbit like “we’re only a few grand away from where I projected us to be on 1/1/19!” to which she patiently responds “that’s great, dear.” Whatever’s left goes into personal accounts that we’ve had since before we met. Those tend to be used for gifts to each other, expenses… Read more »

WantNotToWantNot
WantNotToWantNot
2 years ago

As usual, J.D., you’ve put your finger on a topic that is central to creating wealth and a no-stress financial life. While everyone’s situation is different, here is what I have experienced: In my first marriage, my SO and I had separate economies (I was running a business) and we had a joint account to which we contributed, based on our incomes. It was all very logical. But we were young and money still equalled freedom. While the eventual divorce was amicable (and unzipping our finances was a snap), I later felt that not merging our finances allowed us to… Read more »

JoeHx
JoeHx
2 years ago

I’ve been married almost six months now, and living together for over year. We have one joint accounts, but most of our accounts are separate. We have joint finances, though. There is no my money/her money.

The biggest difference between my money philosophy and hers is how we manage our emergency fund. I prefer to just have one big emergency fund, whereas she prefers to have many different accounts for different types of emergency funds. I relented early on and let her do her thing because I couldn’t justify my position solely with numbers.

Jan
Jan
2 years ago

We have been married 37 years. We have always had a joint account- and an allowance. Moving as often as we did, we had to have a large emergency fund (Nine residences before 40- think utilities, deposits and all). We also chose to have a large travel fund (22 countries before we were 40). The allowance has been $100 to $300 a month depending on income. The children each got an allowance as well- to purchase clothing and fun- they learned budget early. BTW- we never hit a very low, six figure joint income until we were 50. We, each,… Read more »

S.G.
S.G.
2 years ago

I think it’s also important to poke YOURSELF. Very often we know what we think, but we don’t always know why we think it or where we’re willing to compromise. The likelihood of two people with the same philosophies getting together is rather remote, though you will likely start to think more like each other as time goes on. But when you talk about money you should consider what your hard lines are and what you are willing to compromise on. My SO is significantly less frugal than I am. I knew that going into our marriage and we have… Read more »

S.G.
S.G.
2 years ago

Regarding the money relationships, i think there are valid reasons to not merge finances. These include second marriages where heirs should be protected, or if one person has significant personal business interests or otherwise complicated finances. On the flip side I wouldn’t say I think more couples should have merged finances as much as I think the reasons many people don’t merge finances isn’t good for relationships or society. I think separate finances when you plan on having kids is a horrible idea and can lead to more problems than it solves. I know moms who work when they would… Read more »

brian @ singledadmoney
brian @ singledadmoney
2 years ago

My girlfriend and I have separate finances, but very similar goals regarding saving and investing. We keep our annual budgets side by side on the fridge. For now, she pays rent like a roommate which is about 1/3rd of the housing costs. The difference is well made up in groceries since she gets home a couple hours before me and does most of the shopping. My grocery bill has dropped significantly. If our relationship status changed in the future, in either direction, we’d both be in good positions.

Crew Dog
Crew Dog
2 years ago

Married 20+ years. We’ve always had a joint checking account and shared everything, but we’ve also always had separate credit cards. This enables both partners to build individual credit histories. It also allows us some independence and the ability to buy presents for each other without spoiling the surprise. Our credit cards are paid in full every month, and are automatically deducted from the joint checking account, so we can see how much each other is spending, but not what they’re spending it on. We’re both pretty frugal, so extravagant spending has never been a problem. We meet periodically to… Read more »

Steveark
Steveark
2 years ago

We combined everything when we married. We are FI, no debt and left the work world years ago for early retirement. We could spend a lot more but we have everything we need. We have never had a single money fight or serious disagreement in over 30 years of marriage. It baffles me when people find they have serious disagreements on money after they marry. Why weren’t they talking about it before they tied the knot? If you don’t agree largely on money you do not need to get married to each other.

Cindi
Cindi
2 years ago

My husband was poor. I come from a very wealthy family. When I first met my husband he had $1000 cash in his pocket. He also had holes in his shoes. When my dad met him, the first question he asked my future-husband-to-be was how much money he had in a BANK? My father was not interested in the wad of cash in his pocket. When DH answered he had zero, my father just brushed him off. Why did I date someone like this? Because I knew instantly this man had a talent and if used correctly, he could earn… Read more »

MeganS
MeganS
2 years ago

Has anyone ever heard of a money boot camp? My husband & I are doing Whole 30 right now and its been great to spend the month focused on our diet and bodies. But I really want to do the same thing with our finances! I’m looking for some sort of framework to give us some steps to get organized.

Lady Dividend
Lady Dividend
2 years ago

Recently a close friend gave me a strange look as I explained how my fiancé and I manage our money. We have joint expenses that we have both agreed to pay. For example on January ‘s list was camp moustache, pet food, and wine. At the end of the money we add up all the expenses, divide by half and whoever paid more gets an e transfer from the other. I like everything to be fair and equal but sometimes I really wish I had a stash of money to buy something nice to benefit the both of us. Maybe… Read more »

S.G.
S.G.
2 years ago
Reply to  Lady Dividend

I ask this in a totally respectful way, as it just isn’t how I think and I’m truly interested in the answer:

What does equal have to do with fair? And what do either of those have to do with a romantic partnership?

S.G.
S.G.
2 years ago

Okay, I have some serious questions for those of you who keep separate finances: How do you divide children equally? What is the fair division for carrying a child to make sure the mom’s side is “fair”? Would either of you want to scale back your career for a child? What would that do to your finances? Is it assumed that both partners have equal earning potential? If they don’t, is equal fair? Or is fair more important than equal (and do you have to agree on the definition of “fair”)? Do all chores have to be divided equally as… Read more »

Eileen
Eileen
2 years ago
Reply to  S.G.

Hmmm, most people that posted about separate finances did not say it was “equal”, just separate or a hybrid. I will be married 30 years next month. From Day 1 we combined our accounts/money completely. About 10 years ago, we ended up separating things a bit. The reason had nothing to do with any conflict, it was because he was using our checking account for some work expenses and it tripped me up a few times (being the bill payer). Our arrangement is that we each have a checking account but a joint savings account. He xfers money into my… Read more »

Eileen
Eileen
2 years ago
Reply to  S.G.

Just to address one of your examples. Say we need to get our house windows washed. I want to do the project ourselves but he is less interested. Sometimes I’ll say “I don’t feel like spending that kind of money … we can do it”. And sometimes he’ll agree, or sometimes he’ll say “it’s worth it to me to pay someone to do that”. And that’s the end. No one is annoyed or pissed, it’s just a decision that’s made. Our system allows both of us to decide if we want to spend our disposable leftovers monthly, or save up… Read more »

Eileen
Eileen
2 years ago
Reply to  Eileen

Ugh – to clarify. In the windows example…if one of us wants to pay someone to do something, then *that person* pays for it, rather than both of us. If we both agree, we’ll split it. If one of us just bought something and are lower on disposable funds, we come up with contributions that make sense. If I have the funds and want to pay someone to do a yard project…..I just arrange it and pay for it. It’s not hard. I mean we like and trust each other and want each other to be happy. We just don’t… Read more »

Sean @ Frugal Money Man
Sean @ Frugal Money Man
2 years ago

My fiancée benefit tremendously because we are on the same page financially. All of our goals are the same, and our habits are the same in terms of saving towards what we want. None of this could have happened if we didn’t have the discussions early on about our finances. Because we laid out our dreams on the table up-front, we were able to come to strong financial resolutions early in our relationship.

Excellent post!

Laronda
Laronda
2 years ago

We’ve had joint finances since we married 15 years ago. In that time we’ve moved across the country and had three children, so respective salaries have changed, expenses sure have changed, and I’ve been a stay-at-home-parent for 10 years now. For us, joint finances have made things easier as we always know exactly how much we have where. It also helped ease the guilt I did feel when I was first staying home with our oldest and “not contributing” as “our money” was still “our money.” I handle most of our finances, which we’re both happy with, and my husband… Read more »

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