We are a long-winded couple, and even though we are a well-oiled financial machine, I would not want to sit down for a dinner of cold takeout and discuss spreadsheets.
No, our money conversations have been had over long highway drives to visit family and friends and unexpected car repair bills, and the like.
And while it would be lovely to figure out finances once and for all and have them be no issue, the reality is that we bring different financial habits, upbringings, and values to the table.
So figuring out cash flow for two people without somehow stripping one of their autonomy is a tall order.
Combining the cash flows of two individuals in a relationship while preserving both parties’ individuality is a task of great importance that must be addressed daily and, above all, without undue stress.
While building a collaborative financial life can be complex, it is by no means necessarily complicated.
So long as you’re aware of the different elements that are required to achieve a balance of your individuality and of your shared life, you can find a system that works for you and your partner.
Building a collaborative financial life requires open communication, planning, and a good structural setup.
If you put these elements together, then your financial life will run smoothly, and you can concentrate on more interesting things.
Moving Beyond the One Size Fits All Mindset
Every couple is different when it comes to managing their finances.
For some, money is tracked and accounted for at every step.
For others, money is viewed with a more relaxed perspective and spent as needed.
So, what happens when two different people with two different ways of handling money merge into two different people in one relationship?
A clash of two perspectives!
I have noticed that many couples, especially newlyweds, fail to realize there are many ways to handle joint expenses.
I feel that people often fall back on extremes, such as merging all accounts instantly and becoming one financially accountable unit, or keeping completely separate accounts and sending money back and forth to pay for joint household expenses.
As with most things, there is a middle ground that can help two people manage their finances while remaining two financially independent individuals in a relationship.
Many people find a middle-ground approach to be the most effective way to run their finances together, in which the two individuals in the relationship can each maintain their own financial autonomy and have their own bank accounts and savings goals.
Still, they can also work together on their shared living expenses, their jointly managed emergency funds, and their jointly managed long-term financial goals.
Creating a System That Operates on Autopilot
At first, it may seem like small things, like who paid for the latest groceries or if the latest electricity bill has been paid.
But it can really add up over time.
For example, it would really help if one person didn’t always have to handle all the money-related tasks.
Both partners should know what’s going on, and be able to help with any money-related decisions.
It would also be really helpful if there were a simple place to keep track of money for shared living costs, savings, and long-term goals.
Having a simple, centralized hub for joint financial commitments can really make things easier for both partners.
Solve everyday cash flow issues and maintain the independence of each individual.
This can be achieved by setting up a centralized account for all joint financial commitments.
This account can include items such as money for rent or a mortgage, utilities, groceries, and savings towards financial goals and objectives.
It changes everything. Really, it does.
Set up a joint account and get all of your recurring household bills, such as rent, paid automatically from it. Finding the best joint bank account for your specific needs makes it easy to set up these automatic transfers and keep everything organized.
The rest of your spending can be left to each partner to manage in their own separate accounts as they see fit.
After you have each put aside the same amount of money for savings and for any other joint goals, you can each do with the rest of your money as you like.
Preserving Personal Autonomy
Having a joint financial hub to manage your shared obligations is key to a healthy financial relationship.
However, having total financial consolidation also means that one person may end up controlling the other’s money and could be tempted to act as a “financial police officer” (i.e., asking for constant approval for small purchases).
In extreme cases, this can even lead to financial abuse.
This is why having two accounts, one for shared financial commitments and one for personal expenses, is important to maintaining financial autonomy.
A couple’s financial management of their personal funds is important to maintain.
A good rule of thumb is to allow each person to have their own financial account and make their own financial decisions.
Each person should have their own account for their personal money.
After each person has contributed their share to the couple’s joint financial obligations and savings, each person can have a certain amount of money set aside in their own account for personal expenses and uses.
Each person can then do with their own money as they wish, without needing the other person’s approval.
Having individual accounts while working together as a team for financial matters will decrease a lot of conflict.
This way, both individuals can save for their personal goals and dreams while working together to reach their financial goals as a couple.
The Power of the Monthly Financial Check-In
A financial system only works if both partners are engaged in its management.
But if that means spending hours on a Sunday night going through a long and arduous budget, with the cold glow of a computer in front of you, that’s going to burn a lot of goodwill.
It’s likely to lead to many arguments, because of the bad feelings associated with money management.
Why turn managing money into an ordeal?
So while managing money as a couple can be stressful enough in itself, the worst thing is to make it a further source of stress by having long, tense budget meetings late on a Sunday night.
The laptop is open, the spreadsheets are loaded, and you’re trudging through line by line of figures into the small hours of the morning. No thank you.
Have there been any unexpected expenses this month?
Are we on track for our upcoming joint goals?
Are we on track for our upcoming joint goals? Do we need to adjust our contributions for the coming month?
Remember, the goal of a monthly check-in is to review your current situation and plan for the coming month. It should not become a source of stress or an argument.
To keep the conversation positive and on track, keep it brief, routine, and focused on the future.
Aligning Money with Shared Values
Money is just a tool, and at the end of the day, it supports the life that you are trying to create.
By removing all of the daily friction from your financial life, you can use your money to go towards the goals that are most important to you.
Money is just a tool. It can help support your efforts towards reaching your goals.
These could be goals for traveling, starting a business, or just generally helping you to build and secure your future.
Removing the friction of daily finances from your life by using a clear system of accounts, good communication, and respect for each other’s autonomy over their own money makes dealing with money so much easier and less stressful.
It makes it the useful tool it is for driving your shared life forward.
