Relationships and Finance

If you are in a relationship, are you on the same page when it comes to finance? No?…read on!

I recently watched an old episode of How I Met Your Mother, in which Lily was hiding a massive amount of credit card debt from her husband. He didn’t know until they applied for a mortgage. Then she was found out – Cringe.

So, I came up with 3 tips for effectively managing money in a relationship.

1. Discuss Money Things:  Lily learned the hard way that a financial secret can be an epic fail.  Around money matters, experts encourage you to keep the lines of communication open with your partner.  According to a recent study, arguments about money are the leading predictor of divorce.

2. Set Financial Goals: A very millennial way to do this is to hold a weekly money meeting, where you sit down and talk about upcoming bills, how your savings plans are going, and anything else related to finances. There are also apps to help you manage finances jointly.  It is important to get on the same page. One of you may be a spender, and the other a saver, and this can totally stem from how your family handled money when you were a child.  There may be some deep-seated issues at play.  However, you can still work together to create common goals.  For example, if you are going to have children, will one of you stay home, or will you both continue working?  How will you pay for the added cost of daycare?  Spoiler alert: a financial planner can help you think through these things.

3. Consider How You Structure Bank Accounts:  There are a few ways to combine finances.

a. Co-mingle everything together in one joint account.

b. Keep separate accounts and decide who is going to pay for what.

c. Yours, Mine, and Ours. Have a joint account, but then also keep separate accounts.   You can contribute to the joint account either by percentage of income or split the household bills in half, each person contributes that amount.  This way, you have one account for paying things that impact both of you, and you  each maintain your own account to make whatever purchases you want.

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