Couples often decide to share their finances when they start to share their lives with each other. Managing money together can be a challenge, but it can also work well if you do it right. Here’s how.
Talk about it
Not many people enjoy talking about money, especially if you’re struggling to make ends meet. But it’s crucial to be open about money in a relationship, especially if you’re living together or have children. Have an honest, judgement-free approach to money, and be transparent with each other about your spending habits, debts and financial goals.
Create a budget together
If you share finances, you both need to be on the same page about how you spend your money. Spend an evening going through your spending together, and put together a simple budget [link to our article: 8 steps to make a budget that works for you]. It’s important to do this together so you both know what you’re expecting from your money, and so that you both know what you need to prioritise to keep your finances healthy.
Figure out how you’ll do it
Some couples open joint bank accounts, while some prefer to keep their finances separate. It’s up to you which route you go down: joint accounts are handy for shared bills, like mortgage payments, while keeping your own accounts gives you personal spending freedom.
Something to consider is that joint account holders’ credit scores are linked once a joint account is open, so if one of you has poor credit, it will impact the other when applying for financial products.
Check in with each other
Managing your money together is an ongoing process, so be sure to schedule regular chats about your financial situation. Whether it’s looking at your progress on paying off debt or identifying where you’re spending a little too much, checking in on your situation together will allow you to make any adjustments needed and will also prevent any misunderstanding.
Take advantage of couple perks
If you’re married, you and your partner can enjoy a few tax perks that may be worth looking into. The Marriage Allowance lets you transfer £1,260 of your personal tax allowance to your wife, husband or civil partner, which can reduce their tax bill (or vice versa). There are also ways to minimise capital gains tax and avoid inheritance tax when you’re married, which is something to bear in mind.
When you’re in a relationship, you become part of a team. Money is an important part of keeping your relationship healthy, so remove any secrecy around money and deal with it together.
