Defining Money Management Roles in a Relationship

In any good relationship, communication is key. This fact is even more important when it comes to the often-uncomfortable subject of money and how to divvy up financial responsibilities between partners.

Here’s a look at how to talk finances with your partner and figure out who will take on what financial roles.

Communicate

Open a line of communication to make sure that your ideas about money align with your partner’s and that you are working together to get you both closer to your goals. Try to make this one of the first steps you do.

More than four in ten unhappy couples say waiting too long to discuss money is one of their biggest mistakes. The majority of great marriages discuss money daily or weekly, according to one study .

If you and your partner have been dating for a while or plan to get married, your lives and goals are most likely intertwined. It’s time to plan for your financial future, and to do so, you and your partner need to have a thorough understanding of each other’s financial situation.

Unfortunately, money is one of the harder things to talk about. When most of us talk about money, we’re not just talking about cold hard numbers. Rather, money is tied up with all sorts of emotions and your fears, hopes and dreams for the future.

Set aside some time to talk about the nuts and bolts of your financial situations and your goals for your money‑and consider making this a regular discussion.

Lay It All Out on the Table

A great first step could when you and your partner discuss finances is present each other with your basic financial information. Each of you can discuss how much you earn and where your income comes from.

It may also be important to disclose any debts, including student loans, credits cards, car payments and mortgage payments. Finally you can discuss your spending habits, how much you have saved, where you save it and how you manage your money. For example, are you a consummate saver who loves to max out their retirement savings, or do you have trouble setting aside even a few hundred dollars for a rainy day?

With this basic information on the table, you and your partner can identify challenges. You may want to pay particular attention to how much debt each of you has. For example, you may find out that your partner has a lot of student debt or consumer debt.

A small amount of debt can easily be managed, but if they owe many thousands of dollars on their credit cards, this may be cause for concern. This can be a good opportunity to discuss who is responsible for paying off debt and whether you’ll work together to do so.

Debt can feel embarrassing, but this is not the time to hide anything. Being open and honest about challenges can help the two of you nip them in the bud before they become too difficult to manage and get in the way of in your relationship.

Discuss Your Financial Goals

Once each of you understands the other’s personal finances, it’s time to discuss your financial goals for your money.

This discussion is another foundational element of a good relationship since it helps the two of you get on, and stay on, the same page. Consider that, 94% of people who say they have a great marriage discuss money goals with their spouse.

Some of the goals you discuss may be joint goals, such as buying a house or starting a family, while others may be personal, like paying off student loan debt. Sit down together and make a list of all of your personal and your joint goals. This exercise will help you start to define your roles in achieving these goals.

For example, if one partner wants to tackle their own student loan debt, they can identify how much of their income they need to direct toward their monthly bill. You should look at the impact that might have on what they can contribute toward other goals and whether the other partner will have to pick up any slack.

When taking on more complicated joint goals, such as saving for a house, work together to figure out how you want to save. Do you want to open a joint account? Do you want to use a high interest savings account or a brokerage account? You’ll also want to decide how much money each of you can contribute to the account and who will make investment decisions.

As you define your money goals, don’t be afraid to include seemingly small goals on your list. For example, you may want to include eating out at restaurants as a goal and figure out in advance to pay the bill, perhaps by splitting it or using a joint account. Countless arguments have arisen over something as seemingly inconsequential as splitting a check, and figuring out these issues ahead of time can keep conflicts from coming to a head.

Decide Whether to Combine Accounts

The decision about whether to combine financial accounts can be a big one. Yet, if you’re in it for the long haul, joint accounts can be a good way to save for big goals or cover small, shared expenses without worrying about who bought toilet paper last time.

Not everyone decides to co-mingle their bank accounts. You may even decide to have a joint account for some expenses while you and your partner also keep separate accounts.

While you shouldn’t keep your spending habits secret from your partner, separate accounts may help couples feel better about spending on themselves—think treating yourself to a day at the spa.

You can also keep other types of accounts together such as brokerage accounts where you may save for longer-term goals like buying a house. Each partner can contribute to the account and can work together or with a financial advisor to decide how the money should be invested.

You can’t combine retirement accounts, but you should understand how each partner’s retirement saving will eventually affect the other. Consider working with a financial advisor who can help you project how savings habits now will affect your ability to reach large goals in the future.

Divvy Up Responsibilities

By this time, you should have a comprehensive understanding of your partner’s finances, your shared and personal goals, and which financial accounts you’ll be holding together.

Now, think about dividing financial responsibilities. Each partner will likely need to keep track of their individual accounts, such as checking accounts or retirement accounts, on their own. After all, you’re in a great position to understand things like how much you need to save in a 401(k) to get your company’s matching funds.

You may want to join together to cover other responsibilities. For example, it makes a lot of sense for a couple to meet with financial advisors together. That way, each partner has a holistic view of their joint investing and whether or not they’re on track to meet their financial goals—and what each has to do to get there.

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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA /SIPC .
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