Seven Tips For Managing Money in a Relationship
How you and your significant other or roommate can achieve common financial goals while respecting each other's boundaries.
Few things can put more strain on a relationship than money and the responsibilities that come along with it. That doesn't have to be the case. If you're both smart and considerate about how you manage money together, you and your significant other or roommate can achieve common financial goals while respecting each other's boundaries.
1. Have a conversation.
Financial discussions are not always the most comfortable ones when you're in a relationship and trying to figure out who needs to be paying for what, who needs to chip in more, who needs to be paying certain bills, etc. These are, however, important conversations to have, and ultimately both people will benefit from having a clear understanding of what is expected from each party.
2. Compromise and make sacrifices if needed.
When you're managing money with another person, you're going to come across purchases and expenses that are exclusive to each person. There will be things the other person is spending money on that don't necessarily benefit you, and vice versa. You may not even agree with how the other person is spending money, whether it’s on hobbies, entertainment, or something else. As you're having your discussion(s) about how to manage money, both of you should ask yourselves about spending that can be done away with. If both people are willing to compromise and make sacrifices, the whole situation will be easier for the two of you.
3. Avoid having too much of the burden placed on one person.
It's wise to share the duties, not only when it comes to bringing in income, but also when it's time to pay bills and manage accounts. Make sure both parties understand which items they are responsible for keeping track of, and always communicate about what's being purchased and how much is being paid, as well as how this affects your current funds and any upcoming plans/expenses. Each of you will have different strengths, such as understanding investments or tax knowledge.
4. Use apps that allow both of you access to important information on expenses.
Even if you need to share a log-in, use apps that help you manage and save money. There are plenty of budgeting apps that can help you both keep on track. The Balance has a list of eight of them that are worth checking out.1 Even a simple spreadsheet app like Google Sheets can help you both stay on the same page while creating your own reports to suit your needs and habits.
5. Encourage frugality, but consider flexibility.
Being frugal is never a bad idea in practice, but if one person is constantly complaining about the other person's spending habits, there is going to be resentment, and this is not going to affect your relationship in a positive manner. Discuss areas where spending can be reduced, but be flexible enough to allow both people to enjoy the income they work for.
6. Open a joint bank account.
Consider opening a joint bank account. Doing so will ensure that both of you are always on the same page in terms of the money that is available and where it is going.
7. Roommates are also relationships.
Not all relationships that involve sharing financial duties are of the romantic kind. Simply having one or more roommates also qualifies. It can make things all the more complicated. Much of the same guidance applies, but the nature of the roommate relationship is completely different, and may lead to animosity if not handled right.
"One of the lesser-known issues that roommates have is who actually pays the bills," says personal finance writer Zina Kumok.2 "Sometimes it’s easier to have the more responsible person pay all the bills and then have their other roommates pay them back for their share. In my experience, resentment can build if only one person is managing all the bills. Making payments on time is stressful, especially if it takes your roommates a couple days to pay you back. This is especially true if you have problems with your utility providers and you’re always responsible for calling customer service."
So perhaps divide up the responsibilities. Be sure to put together a budget, including rent, utilities, groceries, and household supplies, and determine who pays for what.
Regardless of whether you're looking to improve money management with a significant other or a roommate, the key is to be respectful of the other person's feelings and ideas while sharing the load of responsibility.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC