How to Manage Money in a Relationship

Have you ever argued with your partner over money? One of you may have carelessly spent money, not saved enough, saved for the wrong things, or whatever. If so, then you are not alone. It’s a normal thing that most couples in the world struggle with.

Love and commitment are essential for a lasting romantic relationship. But it’s not just that. Couples don’t often think about it, but money is also critical. Money-related issues usually cause tension between couples and escalate into bigger conflicts.

This is often caused by differences in how couples manage money. But don’t worry, this article will offer clear guidance on how to manage money in a relationship.

It’ll tackle joint budgeting strategies, financial communication, goal setting, and more to minimize financial problems in your relationship. Start by reading below!

Why managing money in a relationship matters

Money is critical in romantic relationships. Good money management can improve your sense of security and satisfaction in the long term.

Yes, you can create this financial stability with a steady income, but it doesn’t end there. Money management skills, such as spending money wisely, saving, and investing, are perhaps more important than your income. This is also foundational in forming long-term stability.

Communication between couples is also important. Even if one – or indeed, both – couples have healthy financial habits, if they can’t communicate their financial goals with each other, they’ll still be headed down a rocky road.

Healthy communication allows couples to discuss each other’s financial conditions, develop joint strategies, and determine aligned financial goals. When couples have the same financial vision, this will strengthen each other’s trust and strengthen the relationship.

But why is this so important? Managing finances as a couple helps you achieve long-term goals and dreams.

For example, owning a house. Most couples in a romantic relationship want to own a property someday, but it’s a difficult venture to do alone. By managing your money together, you can work toward making that dream come true.

Your goals can be anything – from vacationing together, relocating to a new country, starting a business, or others.

Conversely, Research shows that poor money management creates poor financial conditions in a relationship, thereby reducing relationship satisfaction.

Practical strategies to manage money as a couple

Handling money properly in a relationship is essential, but what can you do with this information? How do you apply it to ensure your relationship is stable and lasting?

There are several great ways for you to manage finances in a relationship, so you can achieve shared goals with your partner. This encourages stability in the relationship, thus increasing the satisfaction felt in the relationship. Here are the best practices:

Have regular money conversations

Regular talks about finances are important.

Hold discussions about your financial situation as a couple. Talk about money problems, common goals, or money management roles. Having regular financial talks can reduce money conflicts, leading to increased relationship satisfaction.

But remember that some people find it difficult to discuss finances, even with their romantic partners, because they feel it’s taboo. Therefore, you need to approach this carefully, in a relaxed manner, so the discussion doesn’t hurt any feelings or cause unnecessary conflict.

Here are some things to consider:

Pick the right time. Set a specific time to discuss finances, so that you and your partner can prepare mentally and emotionally.
Create a safe space. Ensure that every discussion happens empathetically and without judgment, especially if money is a charged topic for both of you. Creating a safe space means you’re both free to express yourself.
Determine the topics to be discussed. Before discussing, set your agendas and talking points. This will let you be more focused and help you prepare better.

Decide on a budgeting system

In managing money, you must also determine the budgeting system for the relationship.

This is so you can use the best system to achieve each of your goals. Both of you can look up the best budgeting systems, and discuss among yourselves which system is best.

Some examples of management systems that can be used include:

Managing finances together in one account. In this system, you both combine the money you have in one account and manage it together. This way, both parties can control the finances of the relationship transparently.
Managing finances separately. In this system, you and your partner manage your finances separately, and each party is responsible for their own finances. You may split utility bills and agree on a process for shared expenses.
Hybrid method. In this system, you’ll combine the two previous systems by forming one joint account to achieve your shared goals, and then have a personal account to meet personal needs.

You can discuss and choose the best method for your relationship. This will vary depending on your respective financial situations, decision-making processes, etc., so you must agree beforehand.

Create shared goals

Determining shared goals is important in managing finances in a romantic relationship. By having shared goals, you and your partner can determine what to do together to achieve those goals.

For example, if you both want to buy a house, you’ll determine the amount of money you need and devise a strategy to achieve that amount. Shared goals also help you focus more on managing your finances. You can determine your priorities so that money can be managed better.

Financial goals in a relationship can be divided into three parts: short-term, medium-term, and long-term goals.

Short-term goals. Ideally, these goals must be financial fundamentals achievable within one year. Examples of this include making a monthly budget, building an emergency fund, or paying off high-interest debts.
Medium-term goals. These are goals for the next three to five years, requiring strategic planning. This usually includes saving for major purchases or paying off debt.
Long-term goals. Long-term plans take more than five years to mature. This includes planning for retirement, preparing an inheritance, etc.

To create shared goals in a relationship, there are several things you and your partner can do:

Discuss the desired goals. Talk about what goals you want to achieve short-term, mid-term, and long-term.
Determine the urgency. After knowing the goals you want to achieve, determine the goal’s urgency level. After knowing it, you can compile the goals that must be achieved first based on existing priorities.
Determine the method to be used. Talk about how you’ll achieve those goals, the things you need to do, the sacrifices you’ll make, etc., so that your goals will be achieved according to plan.

Be honest about debt and income

Honesty is important in many things, including honesty about money in a relationship. Honesty forms trust and openness between partners, which has a positive impact when you and your partner want to set future financial plans.

Financial honesty is often demonstrated by being honest about the following:

Debt
Income
Savings
Personal goals
Money management preferences

These things can minimize the possibility of financial dishonesty in a relationship.

Financial dishonesty tends to increase the possibility of financial infidelity – when one lies or hides something from their partner regarding financial matters, such as hiding debt, separate accounts, etc.

Financial infidelity results in poor financial management, increased debt, or bankruptcy, which can also negatively impact the relationship. Not to mention, it’ll most likely hurt your partner a lot.

Revisit and adjust your plan regularly

Planning and managing money is not a one-time thing; it must be reviewed regularly. By doing this, you can determine whether you are on the right track to achieving your goals.

If you and your partner stay on track, both of you can continue whatever you’re doing. On the other hand, when you feel off track, you can always course correct.

Here are a couple of helpful tips:

Regularly checking your financial condition. You and your partner must periodically check your finances to determine the economic condition of your relationship. Review your budgets, expenses, and goals, and see whether there are any problems.
Finding the source of the problem. If you find a problem, determine the root cause immediately.
Finding solutions together. Don’t go through it on your own, and never let your partner take on that role alone. The whole purpose of revisiting your plan is to work on it with two heads instead of one. Talk about it and come up with a solution you both can contribute to.

In conclusion

It’s important to settle how you manage money in a relationship. Many couples often face conflicts due to poor financial management, even if they have a lot of money. At worst, it can even end your relationship.

Therefore, learning to manage finances together is critical. This can help you and your partner feel understood and that their needs can be met. It helps both of you achieve shared goals, ultimately creating a stable, long-term relationship.

Start by implementing the best practices above. This is the key to a strong and lasting relationship.

If you want to see more resources on finance or money, check out the Relationship Science Labs. The lab uses the research of the Institute for Life Management Science to produce courses, certifications, podcasts, videos, and other tools. Visit the Relationship Science Labs today.

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Wahyu Widayanto