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How to deal with the question of joint finances in relationships

Published March 15th, 2021

Money is also an important topic in relationships. And everyone has their own way of dealing with it. But so it doesn’t become a problem, it’s a good idea to broach the subject early on and, above all, to talk about it regularly. Here’s our rundown of the most important steps when it comes to joint finances.

 Why is it important to also talk about money in relationships?

What does finance have to do with affairs of the heart? Quite a lot, as it happens. In most cases, it already pops up before people are comfortable talking about it. Starting with the question of who pays for the meal on a date: me, you – or do we split it?

And there’s definitely no avoiding the matter when it comes to a couple’s first joint grocery shop, first holiday together or talks of cohabitation. And, at the very latest, when two people are planning to get married, they will need to decide how to regulate their finances together – and to know what exactly this involves.

So the question of money will inevitably arise sooner or later. You can either put your head in the sand and hope that it sorts itself out or you can tackle it head-on. We strongly urge you to take the bull by the horns. After all, talking about (joint) finances is incredibly important. And best of all: it actually simplifies things rather than making them more complicated.   Find more facts and numbers about the pension, paid work and the gender pay gap here.

When should couples begin to talk about money?

When is the right time to sit down together and have the talk about money? “Not too soon, of course – after all, you want to get to know the other person first ... and my finances are none of their business at that stage.”

Perfectly plausible sentiments. After all, the idea here isn’t to whip out your bank statements right after the first date. The first step towards talking about money might just come naturally, for instance after the aforementioned first date. When it’s clear who will be footing the bill, you can follow it up with questions. Such as: why is it important for you to be the one who pays? Why is it important for you that I should pay? Why should we split the bill? The way people deal with money is by no means defined solely by their bank balance – crucially, it also reveals a lot about their background, outlook on life or about current life situations. So if the subject of money is already on the table, it’s best to seize the moment and use it to get to know one another a little better.

With some couples, the first time they talk about money is before going on holiday together: how much is each person willing and able to spend? Is one of them going to assume the majority of the costs because they wanted a more expensive holiday than the other person was willing or able to pay for? And is that a good thing or a bad thing? Or does it even matter? Or perhaps one partner puts more towards the holiday because they realise that their opposite number ends up footing the bill more often – and they don’t feel comfortable with that? Or maybe even because they feel too comfortable with it?

However, a couple should definitely make a point of talking about money when moving in together or when one person spends a lot of time at the other person’s place. This is because spontaneous decisions will have now morphed into regular questions. Who is going to pay how much rent? How do we divide up grocery costs? Do we want to combine our finances and, if so, how should we go about it?

As appealing as these new developments are, they also create new obligations and new challenges. And money matters can often be the elephant in the room. But it’s vital to deal with it right from the start as sidestepping the issue will only cause problems sooner or later.

What questions should couples ask each other about money?

There are so many questions that people can and should ask each other about money. When the time is right. These questions allow us to find out more about a new partner, about their pre-relationship life, about what they want for the future, their role expectations, their views on parenting methods and how they manage their everyday lives. And the answers also give a good indication of whether two people are compatible for a life together. Because even though love starts with romance and rose petals, real life eventually takes over. And then there’ll be no getting around the money issue. Here are a few initial questions that couples can ask one another:

  • Is money important to you?

  • How much do you earn and are you happy with it?

  • Would it be a problem for you if I earned more than you?

  • What was the financial situation like at home when you were growing up?

Find out more about the important questions relating to different life situations that couples should ask each other here.

Joint finances: Which account model fits for us? 

Examining everyday finances together starts with talking about it and then moving on to the next step – coming up with a plan that can be reshaped and fine-tuned again and again. The first thing to clarify is: how do we divide up the rent? Do we want to create a joint monthly budget for fixed costs and groceries? And do we want to set up a joint bank account into which we both pay a specific amount every month and from which all fixed costs are paid?

The advantages of a joint account are plain to see: joint costs are covered by both account holders – and there is no longer any need to check each month whether both partners have stumped up their fair share. Couples can regulate this in their own individual way. Some people divide up a joint account 50-50; others do so based on the ratio of their respective salaries. In some cases, one partner covers the rent and the other pays for everything else.

The options are endless – but the important thing is that it should be fair. Sooner or later, couples should find out which model is most suitable for their relationship and then put it into practice. However, this doesn’t mean that it’s written in stone for eternity. It’s important to check every now and then whether the original set-up still fits with the relationship and the general situation. Because there’s nothing worse than ending up arguing over money. Which is something that does actually happen very often. One in two people have had serious disagreements with their other halves about money.

You will soon be able to find out more about very different approaches to joint and separate account models right here.

What financial factors do I have to take into account in a long-term relationship  

The approach that couples take for their joint finances depends largely on their joint life plan – and whether they actually have one. If two people are planning to spend a long time together, the following three points will be useful for determining what further steps they need to take.

  1. What do we need and want in our everyday lives? → Check what each person has available, make up your mind about the bank account situation and weigh up the advantages and disadvantages for each model. Next, decide on an account model and on how you want to divide things up with joint and/or separate budgets for fixed costs.

  2. What do we want in life and what goals do we have where money is a factor? → Do we want to save up for a holiday together? How much do we want to work and how can we finance that? Do we want to own our own home at some point?

  3. How do we want to plan for our retirement together? → First of all, you should clarify what your pension situation is likely to be like. Then discuss whether you would like to make provisions separately or jointly. You should also take into account factors such as whether you would like to have a child together (with one of you only working part-time) or to have your income tax calculated by dividing your income evenly – and how you want to approach these in your relationship.

It’s important to go through all three areas to make it clear what having and shaping a life together means for each person. After all, this is the only way to ensure that money questions arise as little as possible later on and lay solid foundations for your future together.

But most importantly: both partners should be in the know when it comes to the status of their joint finances.