Relationships and money come in all different equations but working well when it comes to money, whether your finances are combined or not, is really important. There definitely isn’t a one size fits all approach when it comes to cash flow. Whether it’s with your partner, parents, friends or housemates - combining cash can be tricky. Here are nine ideas for sorting your funds out whilst keeping everyone happy. We hope!
1. Time for a chat
Understanding how your partner or friend thinks and feels about money is the first step. Some questions to ask to get the ball rolling are below and you might already know a few answers.
Chatting about each other’s approaches to money could lead to less disagreements as you might realise that your spouse sees things in a different light to you and vice versa.
- How do you feel about your current financial situation? Some words to get the ball rolling could be comfortable, stressed, worried, happy…
- How much do you earn?
- Are you a spender or a saver?
- Do you have any debt?
- Do we have any shared debt? If so, what do we want to do about it?
- Do we have any significant outgoings that are different?
2. Get to know
If you have shared financial products or things that you both pay for such as utilities that one person looks after it’s a good idea to educate the other person about these including how much they cost and when they’re paid. Examples of these are;
- Joint accounts
- Joint mortgages from a personal account
- Utility bills
Make a note of the details of these accounts somewhere safe that you both have access to in order to stay informed. For example, if you’re a couple and something happens to one of you and the mortgage comes out of one person’s account, the other person will be able to contact the lender with the correct information. Morbid, but helpful! Maybe chat about the financial products that you both hold too and get a good picture of the other’s finances. Things like;
- Credit cards
- Savings accounts
- Current accounts
- Store credit cards
You know we love a goal here at Beehive Money.
Having joint and separate goals is important as a couple to again make sure you understand each other's situations. For example, you both might want a new kitchen but if someone wants a new campervan and the other a new TV, your savings goals might not match up. Only have shared savings accounts for items or experiences that you both want such as weddings, holidays, honeymoons - anything that you both really want.
4. Joint accounts
If you already share a joint account or you’re thinking of getting one then there’s a few things to know;
Read more about your credit score and how to improve it
- Your credit ratings will be affected by the other person’s
- If you share the account then you are both responsible for the debt and overdraft associated with it.
Knowing how much you’re both spending individually and what you spend as a couple is really handy. Of course you don’t need to know exactly to the penny but just being comfortable with your shared monthly budget for things that you both pay for can stop arguments.
Nail down a household budget and make sure you’re happy with how much each of you are contributing as well as how much you’re spending on bills, utilities and groceries. This may be a 50/50 split or it could be relative to earnings - again, something for you both to discuss and agree on.
Check out our article all about how to save money on groceries
and we also have a downloadable
and an online budget planner
to help you with your planning.
6. Emergency fund
Once you have your budget and you know your expenses, creating an emergency fund to cover things such as broken boilers or new car batteries can be handy. Think about getting together 3-6 months of your total outgoings that you worked out in your budget above, just in case either one of you is ever out of work, too.
7. Make it a date
Schedule a regular money chat. This could be monthly if you like or even every quarter to check you’re both happy with how much you’re paying for utilities and groceries. Just because things are in order after the first time you sort them out doesn’t mean that they’ll be shipshape forever!
Other great occasions to have a mini money overhaul are;
- If someone gets a pay rise
- Someone moves in or out of a houseshare
- A bill or direct debit changes
- A repayment scheme ends
- A mortgage deal is about to end
- There’s something new to save or pay for
8. Share responsibilities
Decide how you'll manage money day to day between you so that you all know where you stand. Here are a few questions to start this chat if you’ve not already sorted it.
- Will you have a shared debit card for household spending or will someone spend on behalf of the house?
- As above, if responsibilities are shared, make sure that the other(s) knows the details about the bills, providers and amounts
- Deciding how bills will be split, whose bank account they’ll come out of, if it’s not joint and make sure everyone’s happy with the set up.
9. Reduce arguements
If you know something might cause a bicker, pre-decide a reaction or a rule. If one person buys something for the house from their ‘personal’ money, will this bother them if the other doesn’t buy something of equal amounts? It sounds very trivial but it can happen easily. Try downloading a budgeting app such as Acasa
- originally designed for housemates - which keeps a tally every time someone buys something and let you know who owes who what. Simple!
There we have nine steps to get you on the road to being informed about shared finances. When everyone’s happy with the set up, full of knowledge and you have shared money goals talking finances should be a little bit easier.