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Money can be a contentious topic even at the best of times, and possibly more so for people in committed relationships, which is why some couples avoid the topic completely. While that may be okay during the beginning phase of a relationship, honest, clear communication about money can actually be a major factor in cementing a happy, healthy, and long-lasting relationship. Whether you have just gotten married or are in a long-term committed relationship with your life partner, there are a few money-related issues you should think about.

What's best: Joint or individual accounts?

One of the first things to discuss with your partner is whether or not you will create a joint bank account or stick to your individual accounts. There is no right answer to this. Both options have their benefits and disadvantages.

Joint accounts

Creating a joint account could mean fewer bank fees, simplified finances and could help foster trust in a relationship. It could also be incredibly helpful in the event that one partner decides to leave their job to look after children, a move that would lead to unbalanced incomes.

Individual accounts

Having your own accounts, on the other hand, helps to protect the individuals in the relationship. But, while it helps partners to retain a sense of financial independence, it can also allow one (or both) partners to hide unhealthy spending habits or lavish purchases.

A bit of both

There is, of course, also the option of doing both; maintaining your individual accounts and opening a joint account for shared expenses. At the end of the day, it's going to come down to clear, open communication, and what suits you as a couple.

Communicating and planning

In case you haven't yet cottoned on, communication is key when it comes to managing your finances (and your relationship in general really).

Discuss your goals with your partner

Tell your significant other what your dreams and goals are and listen carefully to theirs. You can even make an exercise out of it by writing down your goals for the next one to 10 years. See where you have common goals and figure out your priorities as a couple which you can then work on together. It may mean compromising on some of your personal goals for now, but that's part of the journey. If they are important enough, you'll find a way to satisfy these when the time is right.

Create a plan

Once you have laid out your shared financial goals in order of priority, create and stick to a budget that will help you achieve them. Remember, your goals need to be clear, specific and realistic. They should also centre on something that you and your partner have an emotional connection with (like saving for a child), so that as a couple you will keep the motivation, support and encouragement up. At the start of every month, take out your savings before you do anything else. If either you or your partner struggles with discipline (or are simply a bit forgetful), you can set it up as a debit order.

Track your spending and stick to your budget

As a general rule it's important to know what you are spending where. This way you can see if there are some areas (that weekly smoothie perhaps) where you can cut costs. Living in the digital age makes tracking your spending easy. All you need is a banking app or a budgeting app like 22seven. You might find that you and your partner are living above your means and eating out a little too often. It's great for you and your partner to track your spending so you can not only stick to your budget in order to save, but so that you can also get a better grasp on where you really are financially.

Communicate regularly about money matters

Communicating with your partner about finances is not a once-off task. Be open and honest about any problems or concerns that arise as you go and ask them for advice or suggestions. It's also a fantastic idea to have regular budget meetings where you sit together and discuss your problems, goals, dreams and any unexpected developments (such as raises, promotions or bonuses). You can use this time to come up with solutions to issues, new goals or ideas and different ways to save or bring in some extra income.

Share the responsibility

Improving your financial situation as a team is much more satisfying than one or the other doing all the work (it also leaves less room for resentment). Sometimes, sharing the responsibility of savings, minimising debt and ensuring a stronger financial position can also be hugely positive for your relationship as a whole.

Saving and borrowing

Create an emergency fund

One of the things you and your partner should look at starting is an emergency fund, which is money specifically and solely set aside to be used in emergencies. Put this fund in a savings account that is easily accessible (a 32-day emergency fund would be pointless) and ensure that it's one that offers a good interest rate, ideally one that is above the inflation rate. It's a better idea to earn interest on an emergency fund, than to pay interest on a loan.

Invest for the future

Besides an emergency fund, you should also have a long-term investment or retirement fund or both. If you haven't started saving for your future, you need to start now. The key when it comes to investments is to diversify your portfolio and to spread your eggs over many baskets. Aim to have a retirement annuity, an emergency fund, and another cash savings to start with. If you are not in the position to start with all of those, start with an emergency fund as this will ensure that you don't have to relyon a loan when the unexpected happens. Whatever you do, if you haven't already started saving for your future, do so today.

Borrow wisely

If you have diligently put money away in an emergency fund, you'll be covered for most emergency expenses. However, you might find yourself in a situation where what you have saved is not actually enough. In such cases, you need to have credit available to make up the difference. Don't make the mistake of using that credit for luxuries though, and be very discerning about what you take out a personal loan for. You want to borrow wisely in order to not get yourself into a tough spiral of credit you can't get out of, so even when it comes to credit cards, use them carefully and more of a means of achieving a good credit score than a crutch. 

Starting a family

Adjust your priorities and plan

If you and your partner both want children then this is something to definitely factor into your savings plan. Children are expensive and you need to plan carefully (and ideally over time) for any new addition to the family. Make sure having children is something you speak to your partner candidly about from early on to avoid any difficult discussions into the future. If you are on the same wavelength and can agree on a timeline, then the next step is to adjust your financial plan, priorities and budget to ensure you save enough for your little bundle of joy.

Compensate a stay at home parent

If you and your partner both want children then discuss the logistics around raising them. Will one partner stay at home while the other works? If so, how would you both like to see that working out? Would the stay at home parent be paid a salary? Or will you keep a solid and fair budget and a joint account? Whatever you decide, make sure that the decision is not only in the best interest of the people involved, but of the relationship itself.

Learn more

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