Being in a long-term relationship means you share things with your partner. You may share the same house, use the same car, share an Amazon password, and so on. Much of your life together is joined, yet there’s one element that’s often left in the dark.
The topic of personal finances is a touchy subject for many couples. Even those in happy relationships may go silent when it’s time to talk about money. Fundamentally, the problem stems from the idea of joint finances. Every other aspect of your life is joined together, but many couples still have separate finances.
On the one hand, you can see how this makes sense. Both of you may earn a living, so you want to keep your income separate. However, the longer you’re with someone, the sillier it seems to keep things apart. Couples should focus on their finances together, rather than keeping everything separate. You may be worried about this idea, but there are some clear reasons why it makes a lot of sense.
In this guide, we’ll explore why couples should join their finances together and the benefits this can bring to you and your relationship.
Encourages open conversations about money
Too many couples will never talk about money with one another. As mentioned before, it’s a touchy subject. Some people don’t want to talk about what they’re spending money on or how much they’re saving. When this happens, you can build invisible barriers between one another. There’s a lack of openness that may not cause problems right now, but it can later down the line.
Couples who pool their money together will have a more open relationship. When both of you share an account and put money in it, it’s only natural to have conversations about your finances.
This is really advantageous as it helps you both get on the same page. You can talk about your outgoings for the month and notice that you’re spending way too much in some areas. If you want to save money for a big purchase, you can look at your joint account and talk to one another about the best ways to budget going forward.
Money stops being this hidden thing that neither of you speaks about and starts becoming a normal topic. The improved communication and openness won’t just lead to better financial control, it’ll also lead to better relationships.
Prevents financial resentment
One of the main reasons couples break up is thanks to financial resentment. One partner resents the other because of certain financial decisions or money-related issues. Ironically, the most common occurrence is in heterosexual relationships when the female partner earns more money than the male one.
Here, the man starts to resent his partner because he feels slightly emasculated. While we could take a deep dive into fragile masculinity and how society has trained men to believe they need to be the “breadwinner” we’ll leave it at that for a moment! Financial resentment is more common when your finances are separate because you may feel like your partner is splashing the cash all the time. You or they become jealous, which puts a strain on your relationship.
When couples focus on their finances together, financial resentment doesn’t exist. You go from both having your own finances to sharing them together. Everyone is equal and you can both use the money as one. It completely removes the idea of resentment, giving your relationship one less thing to worry about.
Stops bad financial decisions and the debt spiral
Bad financial decisions are easier to make when you’ve got your own stash of money. It’s in your account, so you feel less worried about doing something potentially dangerous. You have no issues maxing out your credit card because your partner doesn’t need to know about it.
Sadly, this leads to more bad decisions and you end up in a terrible debt spiral. You owe more money every month and it’s impossible to get out of. Debt is a terrible thing that can ruin your life and put a massive strain on your mental health. Many people have ended up in a depression rehab center as a direct result of bad financial decisions and debt. How does this change when you approach your finances together?
You’re both less likely to make bad financial decisions when you have joint ownership of an account. You may share a credit card, meaning you have to take more care when spending money. Instead of doing impulsive things, you talk to your partner first. Your partner also sees what you’re spending when you share your finances together, so they can talk to you about certain purchases or decisions.
In essence, the added responsibility makes you think twice about things. You no longer feel like you can do something because it only affects you. Instead, you start recognizing that other people are affected, so you cut down on the bad financial decisions. As a result, there will be less debt in your relationship and the pair of you can make smarter financial choices together.
Helps you achieve financial goals faster
Couples who share their finances and have joint accounts will achieve their goals a lot faster than others. It’s down to a combination of things, many of which we’ve already touched upon.
Having better and more open communication will lead to better financial decisions. As such, you can work on creating a better budget together and saving more money. This enables you to reach saving targets quicker - perhaps you can get a downpayment for a mortgage loan a lot faster than expected.
Moreover, combining your finances means you will have more money in your accounts. This will let you take advantage of interest rates to earn more money. If your money is separate, you will earn less interest as there’s less money in each account. Pooled together, you earn more money even at the same rate. The same goes for joint investments; instead of only being able to invest $5,000 in something, you can combine money with your partner to double that and see greater returns.
Your natural human reaction to money is that you should keep yours separate. You spent your life earning a living, so you’re worried about sharing that with someone else. For the good of your relationship - and your financial future - it makes a lot of sense to start focusing on finances together. Combine your wealth; you share everything else, so why should this be any different?
Dr. Laurie Betito Quotes