Managing Money and Relationships with Jessica Moorhouse
Relationships and money can both be difficult subjects. But when you combine them together? It can be master class in stressing out. So let’s break it down before anyone breaks up!
With Valentine’s Day right around the corner, now might be a good time for you and your significant other to take a long hard look at how you deal with money in your relationship. It might not sound sexy (mostly because it’s not), but figuring out your personal finances together could be the thing that ensures that this coming Valentine’s Day together isn’t your last one ever.
If you’re in a serious relationship, there might be a lot of questions the two of you have to answer. Do you keep your finances separate or should you combine them? Does one of you primarily handle all the finances, or is that something you two handle together? Do both of you know how much debt the other one has—or is there some deep, dark financial secret that you have yet to tell them?
To get a better idea of how couples can best manage their co-finances, we spoke to Jessica Moorhouse, a personal finance expert and host of the Mo’ Money podcast.
“I would say the biggest financial challenge for couples is almost always finding the best way to communicate about money,” says Jessica. “Money is still considered taboo, and most of us tie our own self-worth to how much money we make and how much we have in the bank. That’s why it’s still such a difficult subject for couples to discuss because it’s incredibly personal.”
If you want to thrive as a couple,” she continues, “then you need to be on the same page when it comes to your money.”
- Learning how much your partner makes
- Understanding their debt or outstanding loans
- Recongnizing their spending and savings habits
- Understanding their budgeting and financial goals
“Once everything is laid out on the table, and you continue to be honest with each other, you’ll find it’s a lot easier to tackle life as a team,” she says.
If you want to make sure that you and your significant other are always on the same page when it comes to finances, then Jessica says that “constant communication” is key. Yet, while staying in touch as frequently as possible about your finances is a great goal to have, for some people it’s probably just not doable.
That’s why Jessica also suggests that you and your spouse hold “monthly money meetings,” as a way to catch up and check in. She says that couples should “Pick a day and time that works best for both of you, set up some food and drink, then start going through your finances together. It shouldn’t take more than an hour to get through everything, and by the end you’ll have a better sense of where you both are and where you are headed.”
To Combine or Not Combine?
This is a tricky question for a lot of couples. Combining finances is only going to work if there is mutual trust between both people in the relationship. And even then, depending on your particular circumstances, it might just not make sense to join your finances together.
That’s why many couples that do trust each other still end keeping their finances separate. And that’s okay! Being joined together in marriage doesn’t actually mean that you have to combine your bank accounts too.
Jessica says that “It’s not a matter of being married or not. It’s a matter of how you and your partner want to manage your money together.” To demonstrate what she means by that, she shares an example from her own life:
“When my husband and I were dating and living together, we talked about how we wanted to manage our money. I wasn’t comfortable combining any of our finances, let alone having a joint credit card. So we decided to keep our finances separate. When we got married, we decided to change things. We’d just moved our lives to a new city and we felt like it made more sense to us at that point in our lives to get a joint credit card and share a joint checking account. We’ve been married three years now and we’ve talked about combining our finances since we see a lot of other married couples do this. But after talking about it at our regular money meetings, we decided that approach wouldn’t work for us.”
So don’t let your marital status dictate your financial status. Like Jessica suggests, you should simply have a direct talk with your partner, fiancé or spouse and find out what arrangement works best for both of you.
When it comes to relationships, honesty is incredibly important. And while telling your spouse that they look great in those new jeans—even when they don’t—might be acceptable as a “little white lie”, the same isn’t true if you’re fibbing about your credit card balance.
Jessica says, “before getting married or moving in together, couples should absolutely be upfront about what their current financial situation is. If you have $50,000 in student loans, you need to tell your partner, even if you fear their reaction. Being completely honest about where you are financially is the best way to start a new life together.”
It makes sense to divide up household chores, right? One of you does the dishes and takes out the trash, while the other one cleans the bathrooms and vacuums the den. Splitting up those responsibilities helps ease the workload for both of you.
So it might seem sensible that one of you handles all the financial stuff, like tracking expenses, putting money aside, and paying the bills. After all, taking care of your finances is just another household chore, right? Why not have one of you handle all of it?
Because it doesn’t really work like that.
“One person should never be responsible for all of the finances,” says Jessica. “It should always be a joint venture. That way both of you will have a clear picture of your financial situation.”
Remember earlier in this post, when we were talking about the importance of communication? Well, sharing responsibility for your household’s finances will ensure that both of you are communicating on regular basis. Even if you and your partner are in a tight spot, money-wise, that’s a burden that the two of you should be sharing together.
Track More Than Just Your Spending
For folks who are new to tracking their finances, it can be easy to confuse the amount you’re earning with your net worth. But they’re actually quite different.
Your net worth measures the dollar value everything you own, including your money in the bank. If you have a house? That contributes to your net worth. If you have a 401K, that contributes to your net worth. If you own an incredibly rare Honus Wagner 1909 baseball card, that really contributes to your net worth.
The amount of money you’re making is a factor in your net worth, too. But that’s all it is. One factor out of many. That’s why Jessica suggests that you “not only track your spending but to also track your net worth.”
Tracking your spending is, of course, still very important, so that “you aren’t ever in the dark about where your money went.” But Jessica says that tracking your net worth on a monthly basis “will give you some much-needed motivation to keep on track with your debt repayment, saving and investment goals.”
Relationships aren’t easy. And neither is dealing with money. But follow these tips, and you’ll find that both your relationship and your finances will both get a little bit easier to handle.
About the Contributor:
Jessica Moorhouse is a Millennial money expert, award-winning personal finance blogger and host of the Mo’ Money Podcast. She’s featured frequently as a finance expert in The Globe and Mail, The Huffington Post and Lifehacker, and is on a mission to teach millennials that they can take control of their lives by taking control of their money.
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