you can do to increase the chances of money being a safe harbour.
Let's start by understanding that the money topic triggers a lot of values issues with people (and we know how powerful values are). Here are some of the usual suspects that inflame the passions of people:
It is not hard to see how people can get to a state of high emotion when talking about money!
So - here is one solution that has worked for me and many of my clients. It may not work for you - but I want to share my experience with you in the hopes that you will be able to avert and overcome some of the money problems that wreck havoc on relationships.
My first recommendation is that each of you have your pay direct deposited into the same bank account. It is important here to put the "us" before the "me" in the relationship and as long as the money is divided, so will you be.
Never mind the gold rings and diamonds, the house purchase and all that other stuff - if you are not sharing your bank account, then you are not sharing your life.
Consider that most people do not make the same amount of money so one partner will always have "less" than the other if you are not sharing. How is this fair? How do you pay for things in a way that makes sense?
Consider that one of you might lose their job or that collectively you want to start a family and that one of you will stay home with the kids. Pooling your money is key to living together as a family.
I also recommend that you share a credit card for all household expenses. Preferably your credit card will be a loyalty card of some kind so that you can earn points on your purchases and use those points to either take vacations or buy things that you would like.
All routine expenses can go through the credit card and each of you should not make any personal purchasing decisions over an agreed to amount (say $100) without first asking the other partner. After all you are sharing the expenses here. This single credit card allows both of you to track your expenses and know where your money is going. These days you can put a lot on credit including food, utilities and recurring expenses. It makes tracking things easier and it also keeps both of you up to speed on spending.
This is a key point. Everyone needs their own money that they can spend without worrying about the collective funds. This provides the autonomy, fairness, independence and let's face it, a bit of spontaneous fun.
I recommend that in addition to the shared account and credit card, that each partner also have their own bank account and credit card. This will also help you both develop a strong credit rating. Remember, you still have to pay off your credit cards every month - there is no future in carrying consumer debt. Click here for more information on debt.
Now where does the money come from to fill these personal accounts? Well - this is where your "allowance" comes in. What? Allowance, are you kidding me? Do you think we are children?
No - far from it. I think you are responsible adults that want to make your relationship work and in order to do that, especially where money is involved, it is important to be open, honest, clear and fair. An allowance every month allows that to happen.
I think both partners should be paid the same allowance regardless of how much money they may or may not be bringing in. The key here is to put your family first. Since your family expenses are being paid for collectively, then your allowance only has to be used for things like your coffees in the morning, the occasional night out with friends, clothes, haircuts and the like. It is free "mad" money that you can spend however you choose.
This also allows you to "save up" month over month to buy those larger purchases that you want but your spouse may not, such as a new TV or a cappuccino maker. It is also great for buying one another gifts - knowing that the gifts come from your own money and not just a cut out of the collective pool.
The question always comes up around major purchases such as vehicles and the like. The important thing here is that the both of you are talking about such things and that you don't proceed with a purchase until you agree on the best course of action.
Nothing can be more damaging to a relationship (short of infidelity I guess), that one partner coming home with a new pick up truck worth $40K as a "surprise". This is terribly unfair and will undermine your relationship.
It is actually a lot of fun to purchase major things together. Make it a part of your relationship and you will grow together as opposed to grow apart!
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