Here’s what rom-coms teach us about relationships: They work best when there are wacky hi-jinks and big adventures and a before-the-credits kiss that sets fireworks going. That’s all well and good, but at some point, relationships also get serious and then couples have to start talking about how they’re going to pay for future big adventures and wacky hi-jinks — and also the rent, electricty bill, and groceries.
Talking about, finances, though? It’s stressful. And while you may love your mate enough to do anything for them, you probably didn’t think that “sitting down and discussing the budget for an hour” would be harder than telling people you’d take a bullet for your boo.
The most successful couples, however, are those that are (among other things) able to figure out their finances and talk about them openly and honestly. And to make it easier for the rest of us, people with experience gave us some insight about what works best for them when it comes to handling the money in their relationships.
Be on the same page when it comes to what you want
Being on the same page when it comes to values is an important part of being in a successful relationship. And it’s just as important when you and your partner are working on your finances.
Jeff and Paige have been together for three years and are currently engaged. What works for them is making sure they’re always working towards shared goals.
“Even though we aren’t yet married, we are fully committed to saving money towards a down payment on a house,” Jeff says. “The way we see it, if we can each meet our monthly individual savings goal for that target and all of our bills are paid, we are doing a good job.”
That doesn’t mean that the couple doesn’t run into problems. One of their biggest issues is balancing how to live “right now” and how to live “for the future.” That means lots of not-so-easy conversations about how to spend.
“For the most part we have been on the same page, but there are times when our motivations don’t line up perfectly,” Jeff says. Recently, he wanted to upgrade his vehicle to something more comfortable and practical but it didn’t fit into the couple’s plans to buy a house.
“After a lot of back and forth, we ended up compromising on the specific vehicle and getting something slightly more affordable,” Jeff says.
Create a system in which you both feel you’re contributing
For many couples, it’s impossible to do a 50/50 split when it comes to finances. That’s why it’s important to create a way in which both partners feel like they’re making a contribution towards their financial well-being.
For Erica and Jordan, who have been together for 14 years (married for 7), that meant creating a joint checking account and then agreeing on private spending money they’d get each month.
“Shortly after I graduated from business school with six figures in debt, Jordan received a work transfer to move to London,” Erica says. “We were excited about the new adventure, but while his salary was going to double as part of the move, mine was being cut in half.” This was difficult for the couple because it felt like their financial situation had become skewed.
“The combination of taking a massive pay cut, trying to pay off the loans, and having him earn so much more created an imbalance in our relationship,” Erica says. “I was frustrated that I felt like I couldn’t do things or spend money because I was earning so much less. He was frustrated that I was so financially insecure and keeping us from moving forward on bigger things, like buying a house.”
To get through it, the couple adopted a team mentality and agreed to pool all of their money into one checking account to ensure all their needs were being taken care of and that they were saving up for future goals. Then, they’d each get an allowance in their private account each month.
“Nothing is based on how much one person makes. We’re a team and our money is pooled together in a big pot,” Erica says. “But we still need our independence, so a little spending money each month helps with that.”
Be part of a team, not just two individuals
For a relationship to be financially successful, both partners have to take an active part in the finances, though they may play very different roles. For Ken and Karen, who have been together for 29 years, that meant divvying up who handled the monthly necessities and who focused on helping create a brighter financial future.
“Karen manages the monthly bills, and I handle all of the investment and wealth building,” Ken says. None of their accounts are separate except for their IRAs and 401k. They also make all financial decisions jointly. “If there is not a meeting of the minds or a compromise, the decision is made to forego or table the decision until a future date,” Ken says. That makes it easier to take money off of their list of concerns.
“Money is not a source of stress or fights for us,” he adds. “Even though we have faced stressful situations that had financial consequences, these situations were handled through communication, compromise, and commitment.”
If there’s any advice Ken and Karen would have for other couples, it’s to adopt the philosophy that they’re more able to accomplish more together than on their own and work towards that. Aside from keeping joint accounts, they also set a threshold for how much money they could spend without having a serious discussion. It started with $100 and has grown to $500, though Ken says he and Karen typically discuss any purchase over $250. Above $500, they need absolute agreement.
“Above all else,” Ken says, “always respect the other person’s concerns. If agreement is impossible and compromise cannot be reached, delay the decision. Sometimes delaying the decision results in the desire to purchase something to dissipate. If there’s still a desire, revisit the conversation later.”