How To Best Manage Money As A Team In A Relationship
To manage money as a team can mean different things depending on who you ask. Sometimes it means having one household account from which all bills are paid.
Other times it means having a three-prong system where each partner has control over their own account in addition to a joint family account for necessities and bills.
Nonetheless, a good foundation in a relationship requires having open and honest communication.
Get on the same page as your partner when it comes to money:
Table of contents:
Getting Started With Managing money
One question couples often ask when combining finances is how to set financial goals and easily manage money as a team. This is an understandable dilemma. When you make the decision to start merging finances, it is no doubt a huge step.
As you work towards your financial goals as a couple, it is important to keep that line of communication open.
Addressing these common money issues can help to drastically improve your household finances and provide financial peace.
Step 1: What Are Your Money Values?
Everybody comes into a relationship with their own values regarding money. If you want to successfully manage money as a team, you have to know what those views are.
For example, you may be coming from a family of devout coupon cutters who held on tightly to every dollar. Your partner may be from a family with a more affluent background who could afford the name brand snacks and much more.
Generally speaking, familial upbringing and past experiences with money (good or bad) help to shape one’s money value.
These money values can also be influenced by one’s social circle or career trajectory. The point is, our money values are more often than not a core part of our identity. These values impact the way one sees money and how one chooses to handle their finances. You have to clearly communicate your money value to your partner.
This is especially true if you are coming into a relationship with significant resources or if one person is used to handling all the financial decisions.
Explain to your partner exactly what it is that money means to you.
Do you think money is to be used to buy heartfelt gifts that are tangible or do you think money should be used for creating unique experiences?
Truly evaluate your relationship with money.
This can be as easy as writing down which of your core money values you like and what it is you need want to improve on.
If certain financial habits such as eating out for lunch every day annoy you to no end, then let your partner know. Clearly communicating your money values is key to successfully manage money as a team.
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Step 2: Determine Your Money Rules
Defining your rules around money is the most important money hurdle to conquer with your partner. In other words, you both must decide on how money will be spent in your household. Some important questions to consider are:
- What are the rules around lending money to friends or family?
- How much revolving debt, if any, are you comfortable carrying on your credit cards?
- What is the gifting limit for birthdays and for holidays?
- If you choose to have kids, how much money will go towards their needs and wants?
- Which types of purchases require a check in? (i.e. Can your partner spend $3,000 on a new TV without first checking in?)
- What constitutes as a financial emergency?
- What should be the typical budget for date night?
It might be tough to talk about money, but it is even more difficult to harbor silent resentment towards your partner. The household rules regarding spending money must be clear. This allows each partner to know what is expected of them and can help avoid fights about money in the future.
Step 3: What Are Your Expectations With Money?
“Defining your rules around money is the most important money hurdle to conquer with your partner. “
If you define your “wants” and “needs” drastically different than your partner, then you both certainly need to talk about money expectations. Money issues account for 21% of divorces and is one of the leading causes for why couples decide to split.
You should not assume that you know your partner’s feelings around money expectations. Instead, talk to them honestly about your shared hopes and visions for your future together.
One of the first things to consider is how much money you both want to spend on big ticket items like your housing needs and transportation.
Another great money expectation to communicate is how much money you will set aside for discretionary spending.
When you are clear about your budget, it removes anxiousness and anxiety around purchasing behaviors.
Manage Money As A Team
Communicating your money values, setting money rules and discussing your expectations is vital for a healthy relationship.
If you are having financial issues with your partner, take some time to talk it out.
This approach will help both of you get a better understanding of how each person views money and allows you to successfully manage money as one team.
When your values are in line with your goals and both partners know what is expected, there is an immense sense of financial peace.