Whether you are in a new or long-term relationship, people have different financial habits and views on how they should manage their money. Emma Watson shares her top tips on how you can manage finances as a couple.
How to manage your finances with your partner
14 February 2024
Article last updated 20 February 2024.
Discussing finances as a couple may not be the most romantic of topics, but it’s an important thing to regularly discuss. This is so you can ensure you are on the same page when it comes to both of your goals, priorities, and money management techniques, as well as what financial risks you may potentially face.
Consider your financial compatibility
‘Financial Compatibility’ is very important to the long-term success of a relationship. It’s not only about pounds and pence, but also attitudes, aims, and beliefs. If you are to share a lifetime with someone, it helps if you are both on the same wavelength when it comes to your life goals. Do you both have the same aspirations such as starting a family or when to retire? All life goals will require saving for so it's good to know you are on the same path early on in your relationship. As part of this, take some time to figure out your money style and what beliefs you each might have about money. For example, is one person more of a saver than a spender or consider the way you spend, for example do you value experiences or travel over material things? It’s best to be open and realistic about this so it’s clearly understood in the partnership.
Schedule time for financial dates
Although not the first subject many want to discuss on a date night, factoring in time to regularly discuss your finances is important to make sure you’re on the same page. Bringing up the subject can feel uncomfortable, but having open and honest conversations about your finances aids financial compatibility and will help mitigate concerns and potential conflict down the road. Creating a checklist of things to discuss together, such as bills, financial concerns, or ambitions can help guide the conversation and ease the pressure of either partner bringing up areas they may be worried about. Most of us will be used to having strategy planning sessions at work but few people build this approach into their personal lives but taking a step back to think about what you are trying to achieve together can be time well spent.
Balancing in a partnership
No two couples are the same; everyone will have a different stance on how they handle their finances in a relationship and what may work for you can differ for someone else. That said, it’s very easy in a relationship to have one person take the lead in managing all the finances and bills. But this can leave the other person quite vulnerable without even realising. For example, if the main bill payer or ‘finance controller’ became seriously ill or passes away, or if the relationship were to break down, would the other partner know how to access their finances or how to pay the bills? Having regular, open conversations about your finances, including who your suppliers are and how you access your accounts, are crucial so you’re prepared if the worst were to happen. Keeping both your names listed/registered on accounts can also keep you protected from being locked out of your finances. Equally, maintaining some level of financial independence is also wise so you are not fully reliant on your partner. Keeping your own bank account and savings alongside your joint assets is one such way to achieve this.
Understanding finances when not married or in a civil partnership
Those who are married or in a civil partnership will have legal and financial rights if one partner were to pass away or the relationship were to break down. For those who are not in such a partnership, whether you have been together for 2 or 20 years, it’s important to be aware that these rights will not apply to you. For example, if you were to break up or experience a bereavement, unless you are joint owners of a property, you have no legal rights to remain in the home if you are asked to leave. If you are living together, a cohabitation agreement is worth considering as it sets out what your rights are to the property and other assets you may jointly own.
Make a will
Writing a will is one of the most important things you can do for any loved one, as it means they can be financially cared for and protected when you’re no longer around. It’s common for many people to only write a will when children arrive, but really, they should be written and updated at important life stages, including when you get married. Many people don’t realise that whilst marriage will invalidate your current will, divorce may not and so unless you update your will you may still be benefiting an ex-partner. There are several different types of wills you can have, so it’s best to speak to each other and a solicitor on what would suit best. A will is an important legal document that will ensure your expressed wishes, such as how to split your estate, bank accounts, and any personal items, are carried out.
If you would like to find out more about any of the topics discussed above, or to arrange an initial meeting to discuss your situation, please get in touch with us:
