How to avoid arguing with your partner over money
About a quarter of couples argue about money at least once a week, according to Aviva, while one in 20 say they do so every day. Meanwhile one in eight say their cash-related rows have heated up significantly since the onset of the cost-of-living crisis. Fortunately, even if your partner’s attitude to money is difficult to live with, there are ways to protect yourself from their worst mistakes.
We recently asked people who was better with money – them or their partner – and found that people were twice as likely to claim they were better with cash than they we were to credit their partner with it. And while we can’t all be right, there an awful lot of people who are living with someone who is a financial disaster on legs.
It helps to know the risks, so you should talk to your partner as early possible in the relationship – before anything has had time to go wrong. This means being frank about where you stand – including any debts – and discussing your attitudes to money and your goals. You don’t have to agree about everything, but if you discover your new partner is someone who only ever wants to live for today and carries major debts as a result, it’s better to know sooner rather than later.
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If you discover real differences at this stage, the first step is to establish some ground rules. These may be fairly loose when you live separately – and cover things about splitting costs when you go out, and not owing one another money. When you move in together it will get more in-depth. It should outline how you will cover the joint household costs fairly, and set rules around things like debt and savings. In fact if they have really serious money problems, you need to consider the implications before moving in together. You have two decisions to make: can you cope financially if they can’t pay their way, and are you prepared to do so?
You should also establish honest communication. You don’t necessarily have to tell each other everything about every corner of your finances – 38% of people told Aviva that they keep financial secrets from their partner. However, you need to be honest about important things. We all make mistakes, but we need to commit to coming clean when we do.
At this stage, it’s also worth working out how you’ll actually manage money between you. If you’re considering entirely joint finances, work through the implications carefully. It can give you both complete clarity over your finances. However, it also comes with some potential downsides. You need to be sure you’re not just creating an opportunity to have more rows when you’re spending each other’s money. If one of you is less reliable it also gives them the opportunity to spend money belonging to you both, or run up debts that you’re both responsible for. If you split, it can also be tougher to unwind than if your accounts are separate. And by having a joint financial product you will link your credit records, so their financial misbehaviour could make it more difficult for you to borrow in future.
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The flaws in joint finances mean some couples opt for a joint account for the bills, and to keep everything else separate. This has the advantage that money for bills goes into the account on payday, before either of you can spend it, and it’s there for when the direct debits come out of the account to pay the bills. You’ll need to agree how much you’ll each pay in, and you may want to turn off any overdraft facility to prevent either of you running up debts, but it can be a really useful approach. Of course, as it’s a joint account, you face the risks associated with linking your credit records again. You’ll need to weigh this risk against the fact that if you keep everything separate, you can’t be sure they will always pay their share of the bills. Some people find the lesser of all the evils is to have the bills account in just one name.
None of this completely eliminates the risk that your partner runs up debts, or runs out of cash and can’t afford to pay into the joint account. But it does reduce the risks significantly, and if it can cut the number of money rows you find yourself in, it may well be worth trying.
Sarah Coles is a personal finance analyst at Hargreaves Lansdown and co-presents Switch Your Money On podcast.
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