10 Tips for Couples to Achieve Financial Harmony

How to Manage Money in a Relationship

Money should NOT be a taboo topic in a relationship. What you don’t talk about now, you’ll be fighting about later! Financial harmony is achieved when couples make a shared financial plan together. This builds a strong foundation for their future together.

Disagreements and misunderstandings about money are common among couples. The biggest cause is when couples are hesitant to talk about money with each other (“talking about money isn’t romantic”), and fail to make a joint financial plan (“let’s keep our money separate”).

Here is a list of strategies for couples to manage their money. They are good for relationship health, as well as building wealth!

1. Start with Open Communication

The key to financial harmony as a couple is open and honest communication about money. In a 2021 Couples and Money study by Fidelity, 71% of couples believe they communicate well with their partner, yet nearly 40% could not identify their partner’s salary! Discuss your financial goals, values, and attitudes towards money. Be transparent about your individual incomes, debts, and spending habits.

2. Establish Shared Financial Goals

Set shared financial goals that align with both partners’ aspirations. Whether it’s saving for a house, paying off debts, or planning for retirement, having mutual objectives fosters a sense of teamwork and shared responsibility. The Fidelity study uncovered that over 40% of couples do NOT make long term investment and retirement decisions together! What is you’re 20 years into a relationship and learn you have totally different ideas on where you want to live in your retirement, and how you want to spend your time and money? Even if you’re just starting out, don’t put off planning for retirement. 52% of couples don’t know how much they need to save to maintain their current lifestyle in retirement.

3. Create a Joint Budget

Develop a joint budget that outlines your shared expenses, individual discretionary spending, and savings contributions. A budget helps you stay on track with your financial goals and ensures both partners have a clear understanding of the household’s financial situation. We have created a budget template that is easy to use and provides a dashboard where you can quickly see areas to focus on.

4. Allocate Responsibilities

Divide financial responsibilities based on each partner’s strengths and interests. One partner may excel at tracking expenses, while the other may enjoy handling investments. Shared responsibility encourages both partners to actively participate in financial management. Many couples still allocate one partner to take the lead, with women playing a much more active role, making up 19% of lead roles (25% for millennials). But that doesn’t mean the other is off the hook! It’s key that both parties know the basic goals and plans and are aligned,

5. Maintain Individual Financial Independence

While it’s essential to work together on joint financial goals, it’s equally crucial to maintain individual financial independence. Allow each partner to have discretionary funds to spend or save as they wish. Having to justify your boba tea obsession to your partner can be a real mood killer.

6. Address Debts Together

If one or both partners have individual debts, addressing them as a team may be the best way to go. for your relationship. You won’t be legally responsible for any debt your partner accrues before you are married. However, developing a plan to tackle debts together and support each other throughout the process can benefit your relationship. If this is not possible, agree on a plan together, how you each will tackle your individual debts, and how those payments are prioritized among your household finances.

7. Build an Emergency Fund

Create an emergency fund together to cover unexpected expenses. Having this safety net can ease financial stress and provide peace of mind during challenging times. The ideal fund should be enough to cover 6 months of necessary household expenses. This should be prioritized over other savings. Once this is reached, savings for house, cars and holidays can kick off.

8. Plan for Major Life Events

Discuss and plan for major life events such as buying a house, having children, or career changes. I call this your FREEDOM FUND. My partner and I both had times in our relationship where one of us would take a job with great health benefits and job security, so the other could start their own business. Being on the same page about these significant milestones can reduce conflicts and surprises.

9. Review and Adjust Regularly

Periodically review your financial plan and budget together. Life circumstances change, and goals may evolve. The dashboard on our budget template is an easy way to quickly see where you need to adjust to stay on track.

10. Seek Professional Advice

If you encounter complex financial situations or disagreements, consider seeking professional financial advice or couples counseling. A neutral third party can offer valuable insights and help facilitate productive conversations. The Fidelity study concludes that couples that work with a financial advisor are more likely to agree on their vision of retirement and are less concerned about common financial stressors.

One less Thing for Couples to Argue About

Achieving financial harmony as a couple requires open communication, shared financial goals, and a joint approach to money management. Get as intimate with your money as you do with one another. Build comfort, trust and transparency with each other about your finances. Remember, financial harmony is not about always agreeing on every financial decision but about working together and supporting each other towards a happy and prosperous future. Bonus – you’ll avoid one of the top things couples argue about!

FOR MORE tips on budgeting, saving, investing, wealth building and designing your rich life start here!

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