According to a survey reported on by The Huffington Post last year, money is the biggest bone of contention in couples. They fight about money more than they fight about anything else. This is probably because we are all raised to believe that we should never talk about money, that talking about money is rude. While this might help keep the peace in polite society, it can make combining households quite difficult, especially if the partners involved have very different approaches to financial management.
Thankfully, there are some strategies that can help calm the waters, so to speak. Here are a few of them:
- Figure Out Your Fixed Expenses
Figure out your fixed expenses before you move in together. For example, one of you might feel like an extensive cable package is a must-have, while the other doesn’t understand why you can’t get by with just an internet connection and a few streaming subscriptions. One of you might insist that you need a large place while the other prefers something smaller and more economically priced. One of you might have lived in a fixed energy market growing up and not know that you can shop around for energy providers. For example, click here for a current rate comparison for Alberta. Whether you have low or high fixed costs, its important for you and your spouse to understand what that number is.
Figuring out what you’re going to spend on your basic living expenses (rent, utilities, cable, phones, etc) is important and it is better to do it before you move in together so that neither of you is surprised.
- Talk About Co-Spending Vs. Independent Spending
How do you want to manage your money as a couple? Do you want to keep things simple with just a single bank account for the entire household? Or do you prefer to maintain some independence and keep your individual accounts? There are advantages and disadvantages to both. For example, if you run just one account, you don’t have to keep track of who is paying for what because it comes from a single united account. On the other hand, buying gifts and surprises gets trickier. With totally separate accounts, though, figuring out who writes the check for what can get surprisingly nit picky and stressful.
Many couples opt for compromise: They keep their individual accounts and then set up a joint account to which they both contribute. The joint account covers expenses like rent/mortgage payments, utilities, car payments, etc. Both partners contribute to the account and–as long as joint expenses are covered–are free to do whatever they like with their individual accounts, no questions asked.
Whatever you choose, make sure that you both know what is going on with joint and individual finances. Don’t let one person be totally in charge of the bills or the joint account. Sit down together every month to pay bills and talk about your expenses and your financial health.
- Discuss Your Stuff
Perhaps the hardest part about figuring out your finances as a couple is learning to deal with each others’ spending habits. This is particularly vexing if one of you is a spender and the other a saver. Sit down and have a hard conversation about how you each spend and save money and talk about what you want your finances to look like as a couple. Make no mistake about it, this is going to be a hard conversation. The goal, though, is to prevent surprises from popping up later.
The cold hard truth is that money issues can destroy otherwise happy couples. This is why it is important to talk through your financial issues and set up some structural and spending rules for your future together before you make the commitment. Don’t assume that the money stuff will even itself out later. Get it worked out now so you don’t have to worry about it in the future!