How to Manage Money in a Relationship

If you’re in a relationship, the topic of money is sure to surface sooner or later. Finances can be a big source of stress between couples and understanding your partner’s financial situation is crucial before starting a life together. A one-size-fits-all strategy for managing money doesn’t exist. But one thing is sure: Finances are a leading cause of stress in a relationship. In a recent study, a third of married couples admitted to fighting about money every month.  

When two people with different financial backgrounds come together, talking about personal finance can feel awkward. But money can have a considerable effect on couples, especially in the early stages of your relationship. 

How Your Attitude Affects Money and Relationships 

A major source of conflict in a relationship is how you view money. How you were raised and the attitude your parents had about saving, spending, and investing shapes your approach to these behaviors as an adult. The same is true for your partner, which means you can both have different ways of managing your personal finances. And, they may not be compatible. You’re likely handling your spending and budgeting separately if you’re in the early stages of dating. But once you move in together, keeping financial habits and attitudes separate from the relationship becomes unrealistic. 

You should discuss whether you'll share your money and how you'll handle paying bills and buying personal items. Many couples have a joint account for shared expenses and separate accounts for personal spending. In some cases, keeping your finances separate is the only way to keep the peace. The important thing is that you must work together and communicate to determine what kind of financial life you want to have. 

How you think about money compared to how your partner’s philosophy can make or break your relationship. Take time to understand how you feel about money and what impact that might have on your relationship. Encourage your partner to share their attitude about money, too. 

Understand Your Partner’s Financial Situation 

Whether combining your finances or keeping them separate, understanding your partner’s financial situation can bridge the gap between each of your views on money and relationships. However, this requires honesty from both of you, and not everyone tells the truth. Most people admit to at least one instance of financial infidelity, such as lying about the price of something or hiding an item they purchased. These secrets may stay under the radar for a while, but if poor money management habits affect your credit score, it’s likely your partner will learn all the gory details of your hidden financial life as your lives become interwoven.  

Your credit history can affect your ability to rent an apartment, buy a house and even get a cell phone. It can also impact how much you pay for car insurance and whether you get that job you interviewed for. If you want to buy a house, your credit score could prevent you from qualifying for the loan you need. You could put the house in one person’s name, assuming the single income will qualify. But that can cause problems down the line if you want to refinance, sell the property, or split up. 

If you or your partner lie about your debt or bad credit, the consequences can be devastating. When you’re dishonest, you destroy the trust you once had. Without trust, continuing the relationship can be difficult, and one of the top reasons for splitting up is differences over money. 

How to Know If You and Your Partner are Financially Compatible 

Personal finances can affect every area of your life together. Having unmanageable debt or poor spending habits can snowball into other issues. Be aware of some financial red flag behaviors that may indicate that money has the potential to come between you and your partner:  

• Keeping secrets about money 
• Can’t stick to a budget 
• No clear understanding of your own financial picture 
• Consistently pay bills late 
• Spend beyond means 
• Blame everyone else for your financial situation 

Those behaviors can signal problems to come if they haven’t already surfaced. So be aware. If one of you is motivated by finding the lowest price, while the other cares more about having the best that money can buy, you may have to work together to get on the same page. Having different views about money doesn't have to ruin your relationship. If you’re willing to talk about money goals regularly and without judgment, you could bridge the gap between your differences. To make a relationship work, you need to learn to make joint money decisions such as setting financial goals and discussing large purchases. 

As with most things in a relationship, communication is key as you work to understand your partner’s point of view. Being willing to compromise can go a long way! Even though it can be awkward, talking about financial goals, income, and big purchases in advance is crucial. Keeping secret debts from your partner or not being honest about how much you make or where your money is going can strain relationships. Knowing your partner's attitude about money and how they might impact your future together shouldn’t be ignored.  

Making sure you understand each other's financial personality, goals and expectations is a huge factor in making a relationship work. Check-in regularly to make sure you have realistic expectations about what the financial future holds. Answering some tough questions now could save a lot of heartache in the future.