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Financial Literacy for Everyone

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June 22, 2018

While learning to discuss and manage money as a couple can be a challenge at first, figuring it out can pay dividends for years to come. It's beneficial to start communicating about money early in a relationship and to maintain open communication on the subject as time goes on.

Sharing Money Tasks Could Lead to Healthier Long-Term Relationships

Like many couples, my wife and I disagree about money once in a while. Like many couples, my wife and I disagree about money once in a while. Generally, though, we understand – and perhaps more importantly, respect – each other's financial decisions, including the occasional frivolous purchase.

We've also learned how to effectively combine our finances and share the financial tasks in our household, which were important steps in building and maintaining a healthy relationship as our family continued to grow.

Options for combining your finances
One of the first money decisions many serious couples make is if and how to rearrange their finances once they decide to spend their lives together. As with many relationship-related decisions, there isn't just one approach that will work best for every couple. However, these are a few popular arrangements that could work for you:

  • Move your money into joint accounts. Closing individual accounts and solely using joint accounts is one option. Some couples feel doing so is a reflection of their commitment to one another, and it can be easier to manage household finances when you pool money. However, some people don't like the lack of having a designated "my" money account separate and distinct from the joint account(s).
  • Don't combine finances. Keeping your finances separate might be a good idea, particularly if you both enjoy managing money on your own. However, you may need to have open and regular conversations to ensure bills don't get overlooked and you're both on track with your savings.
  • Open joint accounts and keep your separate accounts. Another option is to open joint accounts for shared bills and savings goals while also maintaining individual accounts that each of you can use however you want. The arrangement isn't ideal if one partner feels strongly about combining or separating finances, but it can be a good middle ground.

Also, remember that your choice to combine your money or keep it separate isn't set in stone. You can try out different options, and you may find that what works best for you both changes over time.

Say you want to keep your finances separate at first. If one partner stops working after you have a child, that arrangement might not work anymore. You could then split the working partner's income between shared and individual accounts or have it all go to a joint account that you can both use.

How you divide your money among accounts could also play into how you split and share financial tasks. With separate accounts, you both may have to take on some of the bills. But even with combined accounts, you'll still have to decide who's responsible for what.

Don't put all the pressure on one person
One slip up can occur when one partner is clearly "the money person" in the relationship. He or she may be more interested in finances and even (gasp) enjoy budgeting. You may be inclined to let that person handle every serious money-related decision, but that could result in issues down the road.

When one person takes on 100 percent of the financial responsibilities, it can actually lead to resentment in both partners: the money person has an added burden of potentially making the wrong decision for the entire household, and even if the non-money person doesn't enjoy managing money and is comfortable letting his or her partner handle the finances, he or she might not want to be left in the dark when it comes to financial decisions or be made to feel like their input/help isn't needed.

Sharing doesn't mean you both have to be involved in every detail
Sharing financial responsibility can take many shapes and forms. It doesn't necessarily mean you have to split up every task so you both do the same amount of work.

For example, if one person is more adept at managing bills, then perhaps he or she takes on that responsibility. Or, if someone stays home with a child, he or she may have a better understanding of how to manage the home-related expenses.

Even when one person does the physical tasks, like tracking and paying bills, you should still sit down together as a couple to discuss the household's budget, how to decrease bills and how upcoming bills could affect the family. Then, you'll both be involved in the decisions and outcomes.

The same principle can apply to other areas of your finances, such as researching large purchases or choosing investments. Whether you have regular financial discussions or have one-off financial conversations before making any big money-related decision, it's the act of having those conversations that results in both individuals feeling a sense of ownership and contribution.

Bottom line: Managing money tends to be complicated even before you add in all the dynamics of a long-term relationship. However, when you are part of a couple, having a system for how you'll share your money and make financial decisions together could help you avoid problems and keep small disagreements from becoming bigger. Couples can strengthen their relationships when they learn how to discuss money and how to work together to achieve shared financial goals.

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This article is intended to provide general information and should not be considered health, legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.

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