Before I jump into this, I want to start by pointing out that this is how we’ve decided to manage our money, Colin and I. We’re by no means experts on how to manage money with your partner, we recognize that our methods may change in the future, and we understand that our way might not work for everyone. But it’s working for us for where we’re at in our lives, so I thought I would share it.
Get over the money taboo
There is a HUGE taboo around money. No one talks about money! You don’t compare credit scores and RRSP contributions with your besties over brunch. It’s not appropriate to ask how much someone makes or how much they spent on their house. It’s bad to talk about money. So the first step for how to manage money with your partner successfully is to get over this. Fight the societal norm that tells you money is evil and it’s bad to talk about. Money is not inherently good or evil. And neither is talking about it.
Come to the table ready to be totally open, honest and vulnerable. This is a big ask – especially if you’re uncomfortable with your own finances or have some money skeletons in the closet. But honesty is the best policy, especially if you’re talking to your partner and working to combine your lives.
So share where you’re at. Colin and I started by going over our money histories – our philosophies about money, how we were raised with money, how we view it today. And then we got into the numbers. We shared with one another our bank statements, income, debts, budgets and everything else. It can feel a little uncomfortable at first but it’s important. I remember hearing on one of my money podcasts (yes, I listen to those) that an alarming number of married people have no idea how much their spouse makes or what their spouse’s debt is like. Don’t be that person!
One reason why money has a negative conotation is because it’s always talked about in terms of scarcity. It’s always about not having enough money, things being too expensive, feeling broke, stressing over budgets, etc. We’re trying to follow the philosophy that money is a tool. It’s something we’re going to use to help us achieve our goals. So we set a number of short term and long term goals, as well as thinking about what we want our lives to look like in the future. So instead of thinking about money in terms of scarcity, we try to put a positive spin on it. We’re managing our money so that we can pay off debts, move abroad, buy a rental property, retire early, etc.
One goal we’re working hard towards is being debt free by 30. I’m very fortunate that I don’t have any debt because my parents were lifesavers when it came to helping to pay for my schooling. Unfortunately, Colin does have student loans and car debt. It’s something we want to tackle together. Our larger goal is to be able to travel and live more freely, and in order to do that, we need to get rid of the debt. Even though it isn’t technically my debt, the goals we have for the future are both of ours. So I know that clearing this debt helps both of us. I also know that I benefit from Colin’s student loans and car debt. I don’t drive, so Colin is a huge help when we need to go somewhere with a car. And if I ever take time off from my freelance work, I don’t get paid leave. So I know I would be relying on Colin’s job, which he needed his student loans in order to get.
Decide how you want to split things
For us, we generally split things up 50/50. Now this can be different for you depending on your plans for how to manage money with your partner. Some couples prefer to split things based on percentages. If one person makes more money, they contribute a higher percentage to shared expenses. Some couples like to pool all of their money together while others prefer to keep it all separate. I don’t think there’s one right way – there’s just the right way for you.
For Colin and I, we split our shared expenses and still maintain separate personal accounts. We use our joint account for our living expenses (mortgage, property taxes, strata fees, hydro, internet) and food (groceries and eating out). For everything else, like our own personal shopping, going out with friends, cellphone bills, etc., we use our personal accounts. At the moment, we both contribute equally to the joint account because our money situations are about the same (Colin does make more than me but he also has more debt, so we call it even). In the future, I imagine this will change. Eventually, we’ll probably pool more of our money into the joint account and have fewer things in our separate accounts.
Schedule money meetings
This is my #1 tip for how to manage money with your partner. You need to schedule money meetings. I know that sounds really lame, but it’s so important. A money meeting is a regular check in and time to share about your finances. For Colin and I, we do our money meeting on the 1st of the month. We both share what our bank accounts and budgets are looking like. Then we talk about any of our financial goals or concerns.
It’s super important that you have these meetings scheduled ahead of time. That way, it’s not one person who feels like the “bad guy” for bringing up money and wanting to talk about it. Otherwise, resentment can build if it feels like one partner is nagging the other about money all the time or one partner is trying to avoid money. Put the money meetings in your calendar and avoid all that!
In order for Colin and I to reach our goals, we need to challenge ourselves a little bit. It’s all about what level of discomfort you’re willing to live with in order to achieve something bigger. So one big one we’re working towards is selling Colin’s car. Obviously, this is much more uncomfortable for Colin than it is for me. But we’ve learned that buying a new car isn’t a smart financial move. Just like engagement rings, new cars lose almost half their value the minute you drive them off the lot. It would make much more sense to just buy an older used car, run it into the ground, and then buy another one. Unfortunately, we do have Colin’s car loan to work on, but it will be significantly less once the car is sold.
Our other challenge for this month is No Money March. Obviously, we’re spending some money this month with living expenses and groceries. But we’re trying really hard not to buy anything else. So that means no eating out, no shopping, no movie tickets, etc. Unfortunately, we cracked a little bit when we were on vacation in Arizona. And with Colin’s birthday this month, I did spend a little on that. Oh, and I booked our tickets to Thailand/Singapore. So maybe we’re not doing as well on this challenge as we thought…
Remember who you’re with and what it’s all about
At the end of the day, remember who you’re sitting across from. This is your partner, the person you love and who loves you. It can be easy to get lost in the numbers, but remember who this is. You’re not just looking at some debt; you’re looking at the person you’re building your life with. Keep the focus on your shared goals and overcoming financial obstacles, instead of keeping a laundry list of money mistakes.
That first money meeting can be awkward and kind of scary. But try to go into it with as little judgment as possible. You’re not judging your partner and they’re not judging you. Managing your money together is about being open and working towards common goals – not shaming anyone. They say money is the biggest thing that comes between couples and leads to divorce. When you’re planning on how to manage money with your partner, remember you’re with your loved one and remember why you’re doing this.
Do you have any tips for how to manage money with your partner?