How to plan your finances as a couple


It's often the last thing on our minds when we’re deeply in love and everything is seen through a smitten haze. But every relationship guru will tell you discussing your finances when you embark on a lifelong commitment is about as important as discussing whether you’re going to have children.

Experts advise that couples discuss issues such as a joint bank account and who pays for what before they get married or move in together. So many of us fail to do this – with devastating consequences. Money is one of the top 10 reasons why people in South Africa divorce, according to attorney Bertus Preller, author of Everyone’s Guide to Divorce and Separation. But money is only “numbers”, says Cape Town financial adviser Linda Smith. The art lies in removing emotion from it and managing your financial affairs competently.

'Ask yourself: what works best for us?'

Approached correctly, money doesn’t need to become a bone of contention. And by managing their finances jointly, a couple could even strengthen the bond between them, says Gregg Sneddon of financial planning company The Financial Coach.

Couples should develop their own way of managing their finances, he adds. “You can get advice from friends but you have to ask yourself: what works best for us? And remember, just as it takes a while to get used to a long-term relationship or marriage, it takes time to get on top of a plan to manage your finances.

“You can choose to each have your own account or a joint account. One of you can pay the rent, the other the instalment on the vehicle loan – it’s your choice. Both parties must be honest and upfront, especially if debt is brought into the relationship. There shouldn’t be any financial secrets.

“Be caring towards each other. There’s no point in being nasty when negotiating your finances. It’s a sensitive issue.”

Communication is the key to success, says Smith, whose company, Abundance by Design, offers financial life coaching. “Remove emotions from the number,” she suggests. “Money is just numbers, but if it’s mixed with meanings, interpretations, feelings and emotions, it becomes more difficult to manage. It’s about negotiation and that takes practise.”

American financial consultant and author Grace Weinstein warns, “When people argue over money, the argument is likely to have little to do with money. It almost always has to do with issues of control, security, self-esteem and, above all, love.” Before working out a joint financial management plan it’s important to know yourself, says Joanne Searle, an executive life coach at Sandton Coaching Centre. “The first step is to look at your own relationship with money: what influences it, your habits and your attitude to money, which is mostly what we learnt from our parents,” she says. It’s not always easy but there are ways couples can jointly manage their finances. Our experts show you how to do it well and avoid the pitfalls along the way.

Trust each other

You should trust your partner with your finances unless you’ve caught them lying to you. Watching your partner’s every move is humiliating. Don’t constantly ask how much they make or spend daily.

It helps to draw up a budget. If you know how much you have available monthly for things such as food, eating out and entertainment, you can avoid landing in debt. Start by collecting slips for a few months and work out how much both of you spend on average a month. This will show if either of you should be tightening your belt. Check what your after-tax income is and set spending limits for each category of your budget. Both must stick to what you’ve decided – this is where most fights originate. Partners might hide purchases from each other or spend more than has been agreed on, which leaves a shortfall somewhere.

Make time

Couples should regularly discuss their finances so they can clarify where they stand and keep track of their goals. You could even go on a weekly money date. Discuss your budget for the month, accounts you expect that week that need to be paid and any other financial issues. Cook a special meal and make it a pleasant experience. These kinds of discussions can improve communication in the relationship.

Set boundaries

A successful financial management plan sets clear boundaries. For instance, agree to pay off your home loan in five to 10 years instead of the usual 20 to 30 years, Smith says. Do you want to invest or to save? Should you buy life assurance or create an emergency fund? It’s important to have a clear plan even if it changes later.

Discuss it sooner rather than later

It’s better to discuss finances before a relationship has becomes serious or you decide to get married. Discuss what accounts you have and your joint debts. Discuss your earnings, your expenses and what contribution each of you will make, Searle says. You must clarify how you’ll be handling your finances. For instance, would you expect your partner to first discuss a purchase exceeding R1 000 with you?

List your goals

Having discussed your joint financial status, talk about your long-term goals. Are both of you providing for your retirement? How soon do you want to pay off your debt and build up a nest egg? If you have children, will both partners carry on working or will one stay at home to look after the kids? Write down these goals and review them every two years.

Discuss bank accounts

There are pros and cons to both joint and separate bank accounts, and you could also have both. A joint account could simplify your finances and promote trust in your relationship. It’s especially a good idea if one of you decides to accept more household and child-raising responsibilities and as a result earns less than the other. On the other hand, both of you might want to retain some financial independence, in which case it’s easier if you keep your purchases and spending habits private. Discuss which option you prefer and speak to a financial adviser if you can’t come to an agreement – there may be financial benefits to having one or the other (for example, lower bank fees).

Set up an emergency fund

If you haven’t yet built up a joint fund for unforeseen emergencies, make this a priority now. It involves depositing money monthly into an account for unexpected major expenses, for instance if a partner were to suddenly lose their job, if there’s death or illness in the family, you suffer a natural disaster or need expensive repairs to your home. Aim to save enough money to cover six months’ household expenses in the event of being without an income for some time. This creates financial security and safeguards your relationship in times of financial stress.

Get out of debt and stay out of debt

Debt can wear you down but it becomes even more debilitating when two people face major debts. Start your marriage or relationship on the right note and pay off your debts as soon as possible rather than incurring further debt – this can put too much pressure on a relationship. Plan to first settle the biggest debts, such as credit cards. Being debt-free is good for your finances and your relationship.

Learn from each other

Don’t think you have all the financial knowhow because your partner might be better informed or more experienced and disciplined in this regard than you. Or you might have expertise in different areas, for example you may be better at doing the daily shopping, while your partner knows more about investments. Joining forces could turn you into a winning team


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