Joined-up thinking: couples and finances

Money, like a relationship, is a very emotional thing. Put the two together and you’ve either got sweet sailing or stormy waters ahead.

Based on over 20 years of working with couples and their finances, here are some tips on navigating the journey together.

Values matter

Discuss your values around money openly. Arguments tend to come when your values aren’t aligned. If one of you is a spender and the other a saver, then when the spender comes back from a shopping spree the other will see that as impacting their freedom. And vice versa too of course: the spender feels their own enjoyment of money is being challenged.

The key is communication: talk honestly and try to see things from your partner’s point of view.

The Bank Accounts System

If you manage your money jointly, use a system where your income is paid into a joint Bills Account, regardless of who earns what. From that account you’ll have direct debits or regular payments going out to meet all your fixed payments, things like utilities, rent or mortgage. You should also have a payment into a savings account.

In addition, set up another weekly payment, which is to each of you – this is your WAM or Walk About Money, your daily spending money. It funds all your variable spending, from coffee to haircuts and dinners out. Agree how much each of you will get as your WAM, it very well may be different.

Debt deliberations

Should a person with no debt take on the debt of their partner? If we’re willing to share our life and money together, then debt should probably be treated the same way as money received – as long as you’re both in it for the long-term.

If you struggle with your financial management then take on good money habits from your partner and grow together as a couple, securing your future and keeping out of debt once it’s gone.

Buying a home301

When you’re ready to buy a place together, save individually. If you’re planning to purchase at least 12 months into the future and are aged between 18 and 40, the best place to save is in a Lifetime ISA (LISA), where you can save up to £4,000 each tax year and receive a 25% government bonus on your contributions at the end of each month.

Retirement planning1

Consider ‘equalising your estate’ – having a similar value of assets and income in each partner’s name.

If one of you has a particularly large pension, then it can be worth building up the other to a similar level. Equalising your combined retirement income is more tax-efficient as a couple.