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Money should provide security, not be a source of stress – in a relationship, too. Therefore, it’s important to talk about finances early on. How do we manage our joint money? What happens if we separate?
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People are reluctant to talk about money – yet it shapes our daily lives. In relationships, it’s often considered a tricky topic and rarely discussed openly, meaning it leads to conflict instead. Making financial agreements at an early stage creates security, while transparent budgeting builds trust.
“People who love their partner talk to them about money,” says psychology professor Guy Bodenmann. But getting it right is crucial: “Talking too little or too much about money can cause tension.”
She lives frugally and considers his purchases unnecessary. He finds her too stingy and wishes that she would treat herself to something. Who’s right? It’s difficult to say, because dealing with money is very individual. A person’s background, income and assets play a significant role.
Guy Bodenmann says: “There has to be transparency when it comes to finances and financial needs, fair arrangements for both partners and a joint say in how money is spent.”
In short, discuss how you wish to manage your finances as a couple and approach the topic as spontaneously as possible.
Do you live with your partner and have a joint account? If your shared finances have a positive impact on your relationship, then your experience matches the perception of many couples according to the results of a study.
There is no universally valid rule about when and whether it makes sense to combine your finances in a partnership. Couples must find out for themselves what works for them. A mix of the two options may make sense, i.e. each partner keeps their accounts and a joint account is set up for shared expenses, such as rent.
In this respect, it doesn’t matter whether you are married, cohabiting partners, in a registered partnership or in a “marriage for all”. A joint account helps you keep track of your spending and income. It also creates a basis of trust and is proof of that trust, as both account holders have access to the account.
If you’re about to move into a shared apartment, the question of costs inevitably arises. Clarifying such issues at an early stage creates a solid foundation for living together in harmony.
If you do not have an overview of the costs yet, it’s advisable to clarify which expenses will be shared jointly. These include, for example:
At the same time, consider how you will divide these costs between you. This can be a 50:50 split – for example, if both of you earn about the same. In the case of a larger difference in your salaries, one option is to split the costs in proportion to each person’s income.
Worth knowing
Ideally, it’s best to start planning how you will share the costs at least three months before you move in together. This will give you enough time to account for all costs involved and to find a mutually agreeable solution.
Living together often changes people’s personal desires and expectations. As a result, you usually start pursuing new goals as well. Are you and your partner planning a trip around the world together? Do you both want to become self-employed and need start-up capital? Perhaps retirement provision is the highest priority for both of you.
Depending on what your specific goals are, there are different ways for you to build the necessary wealth. Talking to an expert can certainly be helpful in finding out which path you and your partner want to take.
Separation or divorce almost always involves pain and suffering. However hard we might try, emotions are almost impossible to control. One thing you can strongly influence, however, is the financial aspect.
Money is often a much-disputed topic in a relationship. It’s not only important to talk openly about your finances; it’s also beneficial. As well as strengthening the trust between you, it also helps you to understand your partner better. Being open about money matters also ensures that both partners are protected in terms of their financial wishes and needs with regard to both assets and debts.
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