Money is one of the major reasons couples get a divorce. It is crazy how much money can blind our senses that we forget that we love our partner. You and your partner must talk about your finances. From splitting bills to savings or investing, you and your partner should be on the same page on your financial plan.
Figuring out how to split finances is tricky especially if one person earns more, so here is a guide to help you.
How to Talk About Money With Your Partner
Before you dive into the nitty-gritty, let's address the elephant in the room: MONEY.
Many people aren’t open with their partners about their finances. That is why issues around money are the leading causes of arguments with your partner.
An open and honest conversation with your partner about your financial situation is important.
Talk about each other’s financial goals, dreams and fears. Also, talk about bills and how you plan to pay them. Don’t be dishonest so your partner doesn’t feel unsafe.
Here are tips to start a conversation about money.
· Set the Scene: Choose a relaxed time and place to chat. Maybe over coffee on a lazy Sunday morning. Keep your phones and gadgets. Ensure there are no distractions.
· Be Honest: Lay your cards on the table. Discuss your income, debts, and financial habits. Transparency is key.
· Listen: Don’t interrupt or let your mind wander. Confide in each other about what your financial plan is.
· Have a budget: There should be a budget for your home. You can use the various plans on savings apps like Jollof+ to set money aside for specific bills or goals.
50/50 vs. Proportional Splitting: Decide What Works for You
Splitting your finances can be a sensitive area. There has to be a fair way to split bills, if not, one of you will feel cheated. How you plan to split things like bills, and other finances should be a conversation that should be had before your wedding. If you didn't, now is the best time to discuss it.
Most couples use the 50/50 approach to splitting their finances, but deciding what works best for your relationship is advised.
Let's look at the two approaches:
The 50/50 Approach
This is the simplest method: split everything right down the middle. Rent, utilities, groceries—divide it all equally. This works well if you and your partner have similar incomes.
Pros: Easy to manage, straightforward. Promotes equality.
Cons: It can feel unfair if one partner earns significantly more or less.
The Proportional Splitting
This method involves splitting expenses based on each other’s income. If one partner earns 60% of the total household income, they pay 60% of the expenses.
Pros: Fair and equitable, especially if incomes differ.
Cons: Requires more math and regular recalculations.
Joint Accounts Or Individual Accounts?
There have been different stories about partners having millions in their private accounts and lying to their partners and stories of people disappearing with money in joint accounts. This makes either choice a scary option. With the right partner, either having a joint account or using separate accounts, won’t be an issue.
There are perks and disadvantages to either choice.
Having a separate account has its pros. You and your partner are free to manage your finances as you like. The con is that it might lead to conflict if one partner is frivolous and doesn’t contribute their quota to the relationship
Using joint bank accounts also has its pros and cons. For starters, it can simplify bill paying.
The good thing is you and your partner have access and can manage household funds with a joint account. Of course, there should be conversations about bills, expenses and other things for this to work well. Another perk is that it will be easy to track your finances.
On the flip side, you or your partner might feel financially dependent. Another con is that unplanned withdrawals or restrictions can lead to conflict.
A third popular option is to have a joint account for bills and shared financial obligations while maintaining personal accounts. Many couples do this as it helps them handle their finances better without feeling dependent.
Set Financial Goals
Financial goals are like the GPS for your money—without them, you’re just driving around aimlessly. Sit down and discuss your short-term and long-term financial goals. Short-term goals like paying off credit card debt, and saving for a vacation. Long-term goals like buying a house, and saving for retirement. It is important to have financial goals.
How To Save As A Couple
It is not easy to save in this economy but saving is important if you and your partner want to achieve your financial goals.
Having a savings account on a savings app can make your savings easy. You can automate your savings, lock your funds and set target goals on the app. Jollof+ is one saving app that can help you with this and more.
You will even earn up to 21% interest on your savings without hidden charges. You can save for a house, a new car or even a trip to Germany.
Don't Sweat the Small Stuff
Remember, the goal is to find a system that works for both of you. It might take some trial and error, but that’s okay.
The important thing is to stay flexible and keep the lines of communication open.
Managing money as a couple doesn’t have to be stressful. With open communication, a fair approach to splitting expenses, and trust you can navigate your finances together and come out stronger.
And if all else fails, there's always pizza and Netflix to smooth things over.
