Managing Your Finances & Avoiding Conflicts – A Couple’s Guide

When a couple makes a commitment, it’s much more than moving in together. You’re combining your style of managing both your lives and finances. This can often bring a few not so subtle differences in your money management style to light.

When a couple makes a commitment, it’s much more than moving in together. You’re combining your style of managing both your lives and finances. This can often bring a few not so subtle differences in your money management style to light.

Money and finances are commonly taken to be an area where many disagreements occur in people’s relationships, even over household chores and children. Where you choose to spend your money is indicative of your values. Therefore, when a couple has a disagreement over finances, they are in fact arguing about different priorities. An example of this could be where one partner chooses to save for that perfect summer getaway while the other chooses the convenience of eating out for lunch every day.

Money can also sometimes be equated to ‘power’ and where there is difference in earning power and spending habits, this can cause conflict in relationships. Couples can address the issue of how they will pay for household expenses by selecting one of the following three models:

1. Combining their income to pay household expenses

2. Dividing household expenses proportionately in relation to their incomes

3. Paying household expenses in equal shares regardless of their incomes

Select the best model

While there is no ‘one size fits all’ solution for every couple, when the couple is going to be combining their finances, they can decide to do so either before or after they tie the knot. There is also an option to have a joint account where finances are combined for the payment of items like household bills, mortgage payments and rent only. This maintains a certain amount of financial independence for both individuals, if they feel this is important to them.

Make a plan and stick to it

Financial circumstances can change over the course of any relationship and therefore, it’s important to review your money model every so often. While initially splitting everything in two and having two accounts may have worked, there may come a time when switching to a single account between the both parties may work better. If you review this situation regularly, it will be easier to know when the right time to switch is.

Communication is the key

The best way to determine and manage a strategy for your finances as a couple is to continually communicate in an honest and open way about it. Each couple decides on a money management strategy in their own unique way. The most important point is to have a clear agreement and it’s always a good idea to write this idea down since memories can be hazy sometimes as we all know.

To help you determine the best financial management strategy for you and your partner, visit our AIB Banking Tools page for handy how-to videos, easy links to our downloads and apps, our loan calculators and links to the AIB Support Channels.

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