Making financial decisions when single and then being in a relationship where you make financial decisions together is a bit like signing up for a three legged walking race with your partner. Independent of each other you are both clearly awesome and have got this walking thing down pat! You have your own style and you know how to get around. You are free and unrestricted and can go anywhere and do anything you want. But tie your right and your partner’s left leg together and it is a whole other crazy walk you will be taking. You want to go left, they are taking a right and sometimes you just hit the deck altogether. Getting on the same page financially when you are in a relationship is a bit like trying to master a three legged race. Unless you can coordinate your movements you are going to do a face plant. Guaranteed.
By the time we hook up with someone, most likely in our 20’s or 30’s we have all had a very long time to develop our way of dealing with money. It may be right or it may be wrong but it is clearly OUR way of going about things. Bringing those ideas to a relationship can sometimes be a little tricky. If you are going to merge two lives together, then maybe down the track create one or two more, then you have to really (really) make sure you can walk the same walk.
I recall a relationship I was once in where it first became apparent to me that people can have such different ideas about money that the relationship is doomed to fail. At that stage I knew little about money but he clearly did and he apparently had money ON TAP. Yeehaa.
He was incredibly generous:- Hotels on the lake front? Always wanted to do that!
- Expensive dinners, WITH the wine match? Oh yeah, this is perfect!
- Presents! Lots of presents!
- He was a really nice guy and we had a huge amount of fun.
But the rose tinted glasses slowly came off when two things happened:
1. Early on in our relationship he suggested that I just put all of my money in his account (not that I had a great deal) as he thought it would make it easier at the checkout of whichever restaurant or shop we were at. I saw this as a form of control.
2. I came to understand that pretty much everything he had was “on tick”. All this fun we were having was actually using borrowed money and he/we would be paying for that fun for a long time to come.
I came from a family who never had much money, but they didn’t buy on credit. Credit was a completely new concept to me and when he explained the mechanics of it I think I instantly internalised that it was a BAD IDEA for me. I could see that we simply had quite different ways of using money. The relationship fizzled out after this. Young love is never perfect!
I stored those lessons away and many years later when I met my future husband I had become a lot wiser. I don’t recall us ever having direct conversations about money (although I did apparently ask him straight out how much he earned) but in the beginning we tried to split everything 50/50. But I was in my last year of University and he was working full time. Inevitably he sometimes paid for more because I was broke and if we stuck to my budget we would be eating Two Minute Noodles on a fun night out. Oh and that night out would have meant we stayed at my flat and didn’t go anywhere near a bar with expensive drinks! Kind of kills the vibe right?
We kept everything as even and separate as we could until after we had moved in together and by then we had sized each other up and started freely discussing money. We then knew we would complement each other with our financial values. We opened an account together for “flatting stuff” and kept our own accounts as well. Finally they fell by the wayside and everything became lumped into a joint account. How grown up!
Fast forward to today and this is how we deal with money in our relationship:
We talk about money. We never argue about money. Ever.
It would be fair enough to say that I talk a whole lot more than him but the point is that we talk about our expenditure on a daily and weekly basis. If he goes down town and buys something, he lets me know and vice versa. That way we do a mental rebalancing of the cheque account because that has an impact on paying the bills that roll in.
Over the years we have made different incomes, both sometimes worked and sometimes not, but no matter who earned it, it is considered OUR money, never “mine” or “his”.
We both have equal access to our bank accounts but in truth I look at them more because he trusts me to manage our money well. I’m really into personal finance so we play to our strengths!
If we want to make a bigger purchase, like a holiday, then out comes the calculator and we discuss the implications that spending that money would have on our future financial plans.
We include our nine year old daughter in these conversations and by setting a good example we are teaching her to be good with money too.
We BOTH feel in control of our financial situation and that is really important to us.
Over the years I have seen the tension that couples who do not share the same philosophy with money have and they inadvertently set out to jeopardise their future together. They bring their history of dealing with money into a relationship but hold fast to their way of doing things, even when the other tries to get them to discuss it. It just creates unresolved resentment.
A friend who has been through a divorce and had to make a new start both emotionally and financially is now in a new relationship. Money was often a point of friction in her marriage and she is determined for that not to be the case going forward. With her new partner they openly discuss finances and what their expectations of themselves and each other are. Having been burned once she is determined to pay her own way in life and although happy to share that life with someone else is not going to make herself financially vulnerable again, like she was when her marriage ended. There are no “lumpy carpets” in their relationship, with taboo topics being swept under the carpet and their honest and open conversations bode extremely well for them going forward.
Both men and women think about money in different ways and it is so important to understand each other's point of view and then make the decision if you are compatible or not. When a relationship moves on from splitting the bill 50/50 at a restaurant to taking out a $400,000 mortgage together you had better make sure you are on the same page if your relationship is going to last. That’s a whole lotta stress to contend with otherwise. Both my husband and I paddle our own waka, because we are different people, but the fact that we are both paddling in the same direction makes cruising through smooth water easy. And when we reach rough water it is far more manageable when we do it together. Having financial control of your own life and your lives combined will make your relationship stronger and give you so much confidence that you can tackle any three legged race that life throws at you.
Happy Saving!
Ruth
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans (NZHL).
