For many couples, discussing money can help them to plan for the longer term and make sure their financial goals are in harmony.
But a recent survey from Starling Bank indicates that a quarter (24%) of married couples, and 30% of people in a committed relationship, do not disclose all about their finances to each other.
This is the sort of thing Talk Money Week (November 6-10) aims to tackle, as it encourages people to open up more about their finances. According to Starling Bank’s survey, one in seven (14%) of those in a relationship say they don’t know what their partner earns, including 9% of those who are married, while nearly a fifth (19%) of couples manage their finances separately, including 12% who are married.
Anna Clayden, a 23-year-old junior advertising creative from London, has been in a relationship with her partner, a business adviser, for over a year, and says the couple don’t discuss salaries right now. “I think, as he knows what my job role is, he has somewhat of an idea of the salary I’m on,” she says – adding that, in some circumstances, discussing incomes could be the right step to take: “If we were to move in together and potentially buy a house, then I think we would need to discuss it, as it is such a big financial decision.”
While some couples may not feel they need to discuss salaries or other financial topics in their relationship at the moment, others may be considering how they can get the conversation started.
Putting time in the diary for a “money date”, when you’re both not too busy and have time to focus, could be a good way to kick things off.
It’s also important to remember that people have different attitudes towards money, so try to avoid being judgemental or bringing blame into the conversation. One of you may be more naturally inclined to squirrel money away and the other may be more of a spender.
Rachel Kerrone, a family finance expert at Starling Bank, says: “Talking about money can help couples ensure their financial goals, concerns and priorities align and create trust in each other to manage finances responsibly.”
To get the ball rolling, here are some aspects of finances that Kerrone suggests couples could discuss…
1. Saving strategies
Kerrone says: “If you’re able to save, it’s good to talk about it. Whether you’re planning to renovate a jointly-owned property or purchase a new car with your partner, you may want to save for these goals together. Get stuck into the details, including whether you’ll contribute equally to savings or if contributions will be proportional to your incomes.
“You can also talk about how you’ll manage savings for joint projects and explore long-term financial priorities, such as saving for a home, retirement or education and establish a plan to work towards them together. You might also want to maintain an emergency fund in a joint account and decide how much you should collectively save for unexpected expenses.”
2. Your incomes and outgoings
Kerrone adds: “I always recommend being transparent about all things money with your partner, including how much you both earn, whether either of you own a property and how much the mortgage payments are. Debt is another, slightly uncomfortable but important topic to be open and honest about.”
3. The ‘awkward stuff’
Kerrone says it can be useful to discuss your credit score with your partner, and understand the implications of sharing an account before deciding if joint financial activities would work for you both.
“If your joint account goes into its overdraft, both of you will be responsible for the debt, so you’ll need to think about how you’ll handle debt and overdraft situations together,” she adds.
“Creating a joint budget can help give couples more control and insight into their joint spending,” says Kerrone. “You can calculate essential expenses like rent, utilities, childcare and groceries, and decide how you’ll divide these costs.”
She highlights using a “budget planner”, adding: “Beyond these essential expenses, it’s worth discussing your individual spending habits, both the good and the bad, to ensure that you’re on the same page.”
5. Your own financial independence
Kerrone adds: “If you do decide to open a joint account with your partner, it’s not something you should rush into, and you need to completely trust the person you’re applying with. It’s important to have your own separate bank account too, so you can have financial independence when needed.”
Remember too that, if the relationship were to end, you could contact credit reference agencies to ask for associations with the other person to be removed, if you no longer share financial links with each other.