Agreeing on money matters is often one of the biggest struggles for couples. How do we communicate what’s important to each of us, and how do we come to financial agreements when we’re part of a couple? We asked Bruce Sellery to break down this tricky subject for us.
1. What are the biggest areas that couples struggle with?
Values: One of the first things couples have to decide on are what their values are. What should we spend our money on? What should we save money for? And is debt okay or not? It’s okay if one partner believes money is better spent on organic kale than skating lessons, but we have to find a happy medium that both parties can agree on.
Communication: Couples must be open in their discussions about money. Don’t have a secret second credit card, and don’t keep quiet if your partner’s spending habits are bothering you! It’s always important to have open lines of communication in a relationship, but this is especially true when finances are involved.
2. What are Bruce’s best tips for couples on how to manage money?
Set up a time to talk: Although it may seem a bit silly at first to set up a meeting with your spouse to discuss money, it’s actually very important. If you have a tough time finding some spare time, book a sitter. Do whatever it takes to make sure you’re communicating regularly.
Align on the future: So much of your financial plan depends on what you want for the future, so be sure to communicate that. Discuss your plans for vacations, your child’s education and your retirement.
Come up with a basic plan: Money doesn’t have to be too complicated! Try making a simple plan, such as: “We are going to set up an RESP, and then set up an automatic withdrawal from our bank account.”
Determine who does what: Assigning tasks and roles in your relationship will help you get things accomplished and lighten the burden on both of you. If one of you is going to go to the bank, the other partner can do the grocery shopping! Keep in mind each partner’s personal strengths and weaknesses and take advantage of each person’s natural abilities.
Know when you need to agree and not to agree: Figure out the give and take. You and your partner aren’t always going to agree on how your money should be used, but try to figure out what’s most important to each of you.
3. How should you set up your finances?
There is no right way of organizing your finances. Every couple is different, so the way that you handle your money matters won’t be the same as everyone else. However, there are two basic models that couples may want to follow:
1. Combine everything: All income goes into one bank account and all spending comes from that account.
2. Separate accounts: Mine, yours, ours (or what Bruce calls the “financial three-way”). Having joint accounts, as well as separate accounts where you can use your own money to spend on your own wants.
For more financial advice from Bruce, watch the videos below: