Ensuring financial compatibility is crucial in any relationship, especially in today’s challenging economic climate where the rising cost of living is putting strain on household budgets. The impact of this financial pressure has been evident in many couples, resulting in disagreements and conflicts. According to a recent survey conducted by Aqua credit card, 35% of UK couples admitted that the current financial pressures have negatively affected their relationship, with 28% revealing that arguments about money have become more frequent.
So, how do couples navigate their finances to avoid conflicts? Do they merge their incomes or keep them separate? Do they save together or individually? And what role has the cost of living crisis played in all of this? Another survey from F&C Investment Trust found that 51% of UK couples do not have a joint bank account, with younger people more inclined to keep their finances separate. Additionally, six out of ten couples do not have a joint savings account, despite sharing similar long-term goals such as purchasing a house, starting a family, or embarking on a dream vacation.
Managing money as a couple is a unique experience for each pair, and there is no definitive right or wrong approach. To gain a deeper understanding, we interviewed six couples from different generations, backgrounds, and financial circumstances to share their personal stories. Here’s what they had to say.
“I’ve already customized our spreadsheet to account for worst-case scenario mortgage costs next year,” says Anna*, 33, who co-owns a house with her partner James*, 32. They are not married and have individual accounts where their salaries are deposited. They also maintain a joint account for mortgage and bill payments, split proportionately based on their income. Any personal expenses related to the house are divided equally, and they alternate in picking up the bill. Anna, who was not taught how to manage money growing up, takes care of the household finances because she prefers to ensure everything is organized. She admits to being an impulsive spender due to her childhood experiences and has encouraged James to avoid credit cards. However, she does involve him in significant purchases without him knowing to share the cost.
Alex*, 40, and Harriet*, 40, a married couple with two children, aged seven and three, approach their finances differently. Alex pays the rent while Harriet covers utility bills. Other expenses, such as food, are shared. They do not assign pocket money but keep any extra income from work for personal use. They rely on universal credit to a significant extent and have used it sensibly, avoiding overspending. However, being on universal credit has impacted their self-worth and mental health due to the need to justify their finances at the jobcenter every month. Nevertheless, they have an open dialogue about their finances and a clear understanding of their financial standing.
Alice Ojeda, 31, and Daniel Redmond, 32, are not married but co-own a house together. They keep their finances separate and split all income evenly between their individual accounts. Alice, a small-business owner, manages her business finances while Daniel takes care of the household expenses. They discuss their surplus income and profits monthly and divide them accordingly. Alice explains that having separate savings gives her a sense of security and prevents unnecessary spending. While facing the cost of living crisis, Daniel reminds Alice that they have financial limitations, fostering communication about their financial situation and goals.
Tash Penford, 23, and George Underdown, 23, who rent a flat together and recently got engaged, have separate bank accounts but have plans to open a joint account. Tash and George have assigned responsibilities for bills, with George taking charge of payment. They express the desire to have a joint account but have yet to find the time to set one up. They maintain open communication about finances and have conversations while cooking dinner or lying in bed.
Each couple’s approach to managing their finances is unique, reflecting their own preferences, experiences, and circumstances. There is no one-size-fits-all solution, and flexibility is key. The most important factor is maintaining open communication and finding a system that works for both partners, allowing them to navigate financial challenges together effectively.
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