The long road to financial harmony

Financial nirvana. Does it it exist?

I’m not sure, but I can tell you that no two people handle money the exact same way, and being on a different page from your partner is a recipe for teeth-gnashing and tears.

However you handle finances – joint accounts, separate, or a mix; equally, or with one person handling the bulk of the admin – reaching some basic agreements about money management is so important. Think along the lines of:

• how you’ll each contribute to expenses
• how you handle debt
• how you’ll save for big goals
• how much is okay to spend without consulting the other person
• how much is reasonable to spend on (fill in the blank – could be clothing, food, video games, whatever)

T and I kind of fell in the deep end with joint finances early on in our relationship. We moved in together, he started a new job and didn’t have a bank account of his own, so organised to be paid into my account. I also started university, we bought a car, and generally had more cash than we’d ever had – but vehicle expenses, getting T set up with the basics for work and life, and letting the extra income go to our heads (mainly to food, actually) meant we struggled a lot.

Pretty early on, our wildly different money personalities became evident. I’ll be honest, it wasn’t easy. But I don’t think it would have been any easier if we’d delayed it. Heck, it might have been even worse, if he’d been left to his own devices.

I can’t tell you when you should have the “money talk” with your partner, or what kind of financial system you should set up. Heck, some people go all their lives without knowing how much their significant other earns. Separate finances make total sense if both parties already have a good thing going individually and don’t mind splitting everything (personally I’d get fed up with all the calculations; do I really want to be keeping track of who last bought toilet paper .. or, later down the track, diapers for our little bundle of anxiety?).

We went all out early on, but I’ve since refined it so that T has his own separate savings account and his own allowance/spending money every week: proof that joint finances can work even when one is a saver and one a spender. Whether we’ll combine savings fully once we get married remains to be seen, but I think we’ll always maintain some kind of husband fund for him to save up for toys – a bigger motorbike, a project car, etc. (Plus of course, even if both parties have access to the joint accounts, it can be nice to have a pot of your own.)

What if it all goes pear-shaped?

I suppose that’s a big one in favour of separate accounts. It’s true, nothing in life or love is certain. But if you have any sense (and I know my readers do) you wouldn’t be meshing funds unless you were pretty serious. Making a personal and emotional commitment to another human being is also a financial commitment, and for some couples that lends itself to joint bank accounts.

Caveat: if I was a celebrity, I definitely wouldn’t. Nor would I fail to get a prenup and I sure as hell would not change my surname. I know every celeb thinks their marriage will be different, but the odds are heinously against you.

Seriously though, while I would not recommend mixing finances as early as we did, I’m happy with how it turned out. We’ve settled into a semi-blissful groove, and if we ever split, it’s decided: he takes the TV, food processor, microwave, and his motorbike; I get the bed, laptop and car.

 

This post is part of Women’s Money Week 2012. For more posts about relationships and money, see the Relationships and Money Roundup