It is rare that the Guardian’s Blind Date column includes a mention of personal finances – most people don’t seem to want to talk about money on a first date. But if a relationship is going to work, agreeing on how to manage your cash as a couple is vital. And never more so than at the moment, when circumstances, and incomes, can suddenly change.
Will Lenehan from the website OpenMoney says there is no right or wrong answer but talking about it is important.
“Disagreements about money usually come down to differing or conflicting attitudes towards earning, spending, saving and sharing money, so look for the areas where you agree – and disagree – and spot any potential problems before they happen,” he says.
“Like every other aspect of your relationship, you should set boundaries around your finances. There might be some aspects you’d be happy to share but others you’d prefer not to. Be clear on the independence you’d like to maintain.”
For many couples, this means running a joint account for shared bills, and separate accounts for other spending. But bear in mind that any kind of linked finances could have an impact on your credit rating. Being married or living with someone won’t create an association with them on your credit file but opening a joint account or taking on a shared mortgage or loan will. If your partner has missed payments in the past, this could have an impact on you later when companies make checks.
If you run a joint bank account, you will both have access to all of the money, and be “jointly and severally liable” for repaying any overdraft – that means if you split up and your ex does a runner, it will be down to you to pay off the whole debt. It also means that you should close the account, or withdraw your cash, if you split up. You can ask the bank to freeze the money but then neither of you will be able to make a withdrawal.
You don’t need to be married to have a joint account, own a property together or find that your partner’s finances affect you – for example, if you live with them and either of you tries to claim universal credit, all of your savings will be taken into account.
For other things, the link is not made automatically and you will need to do some paperwork. If, for example, your company offers a death-in-service benefit, you should tell it who you want the money to go to should you die. The same is true of your pension and any life insurance.
A will is the best way to ensure your assets go to your partner if you are not married – without one, they could end up having to go to court to challenge your relatives for the cash.
If you split up, you will need to go back and alter these arrangements.
We asked readers to tell us how they manage their finances:
‘We’ve gone from being a 50/50 split to me paying bills’
JJ Atkins, 30, and his partner Matthew Rawling, 37, each have a separate current and savings account. “Money has always been an open and personal thing for us,” says the mortgage underwriter from Bradford. “We never borrow money from one another but happily spend money on the other as and when required.”
The money in their personal accounts is their own but they save together for other things such as holidays or special gifts. “We’ve had tough but open conversations about money in the past but it’s always been personally enriching to not shy away from the taboo of money and debt.”
Rawling, who works in the events industry, building stages, saw his work “virtually vanish overnight” because of the coronavirus pandemic. “I’ve been lucky in that my profession is classed as essential, so I’ve been able to work from home since March,” Atkins says. “We’ve gone from being 50/50 split to me solely covering all the household bills and rent each month, which luckily I can do, but it doesn’t leave much spare money.
“Matthew’s taken to doing regular Amazon delivery driver shifts to have an income and, when he’s able to, gives me half towards bills and rent. This doesn’t happen on a regular date and requires some logistics and planning on my behalf to make sure it covers what is required. We used to have a joint current account but now we have just our personal accounts and everything comes out of mine.”
‘If you spend it but don’t declare it, then it’s your fault’
“We made some strict rules when we decided to live together,” says Archie, from Kingston upon Thames, London, of his relationship with his partner. “They’ve worked out incredibly well.”
The 34-year-old works in a school, while his partner is 31 and works for a charity. They decided not to accept any money from their parents as they didn’t want them “having an influence” on their finances.
They split their rent and utility bills on a percentage rate depending on their salaries. Other household spending, such as food and drink, goes on the Splitwise app, “so there is no arguing over who paid out more for this or that”.
Archie says: “If you spend it but don’t declare it on the app, then it’s your fault.”
When his partner was furloughed in July and their salary went down to 80% for a while, Archie paid more of the bills.
The pandemic has focused the couple’s minds on how they can prepare if one of them dies unexpectedly. “We are still quite young and have no dependents but both of us have death-in-service provisions from our employers, and have made sure we’re both named beneficiaries.”
He adds: “Budgeting and honest finances have stopped so much of the worrying and bad blood that we’ve seen with other couples. We feel the system works for us and has also allowed us to look ahead, and trust that if we were ever to get into more serious financial commitments, such as property, we have built firm foundations.”
‘My current account covers most of the expenses’
For Edinburgh-based Wojciech Lesniowolski, 40, who works in hospitality management, and his wife Jagoda, 37, who is a nurse, managing their finances has not always been a harmonious experience.
“We used to have fights over our spending as we didn’t really know how much was going out of our accounts,” Wojciech says. “It was chaotic. We used credit cards a lot more and we had to take out a loan while my wife studied to consolidate the debt.”
Things changed when they had their children, Cornelia, eight, and Natalie, 13. “We created a spreadsheet where receipts are included on a calendar,” Wojciech says. “My current account covers most of the expenses but my wife contributes a certain amount each month based on what she can afford. We’ve managed to save 44% of our disposable income, as well as provide Spanish, music and swimming lessons for the girls. We’ve even been able to overpay our mortgage by 100% each month since June.
“It sounds boring and structured but it helps us to achieve our goals like saving for holidays. It’s quite disciplined.”
‘When we go out for a meal we go Dutch’
Tom Misselbrook, 72, and his wife Hazel, 79, have been married for 23 years. They have a spreadsheet for their joint accounts (one for household bills and one for groceries), which they use to budget their monthly expenses.
“Both of us have retirement incomes which are different,” he says. “The spreadsheet calculates how much we should both pay into the joint accounts on a proportional basis based on the value of our individual incomes.”
Once they have paid what they need to, what is left is shared equally between them for their own individual use. “When we go out for a meal or on holiday we share the cost and go Dutch,” Tom says. “If there is an expensive item for repairs, such as a new washing machine, this is either equally shared or paid out of our savings.
“We both think the system is very fair as although my income is about double my wife’s, we both, after our household bills are met, have an equal amount of money to spend on ourselves, children and grandchildren.”
Each year, with pension increases and increased household costs, Tom updates the spreadsheet, which automatically adjusts the amount they share. “I’ve sometimes thought about marketing the spreadsheet as I think it would prevent large numbers of marital rows, but it does depend on both parties accepting that although they may have income differences, they both end up with the same amount of money to spend on themselves.”