Should you manage money jointly or separately?

Managing your money together when you’re in a serious relationship can be tricky – find out how to plan your joint finances and avoid headaches and arguments over money.

Things to think about when deciding how to manage your money

There’s no ‘one size fits all’ approach

You can use our free Budget planner to get an idea of how much money you and your partner have coming in and out.

How you manage your finances will depend on both your attitudes to money. You may find some areas where you’re happy to share the responsibility, but others where you need to reach a compromise.

Before you get started, try to understand each other’s approach and attitude to money. This will help you find areas where you agree – and disagree – so you can spot potential problems before they happen.

Be wary of joint finances if one of you has a poor credit history

Living with someone, or being married to someone with a bad credit score won’t affect yours. However, as soon as you open a joint bank account or take out a mortgage together, your credit rating could be affected.

For example, you will be ‘co-scored’ if you apply for credit. It’s a good idea for both of you to check your credit rating before combining your finances.

Trust and fairness

When you open a joint bank account you’ll both be responsible for any debt or overdrafts, so it’s vital that you trust each other. You need to be clear on what you consider to be a fair contribution and stick to it.

Remember to review any agreements if something changes. For example, if one of you changes job, or if you have children.

Set boundaries and be clear on independence

Be clear from the very start about what you expect. Try setting a spending limit, so anything above that amount will need a joint decision before you buy it.

Make sure you’re upfront about how much independence you’ll both have. That way you both know where you stand and won’t need to argue over any disagreements. Have a plan for if things go wrong and don’t be afraid to write it down if you think that will make it easier to stick to.

Make sure you are equal partners

Avoid a situation where only one of you understands your finances.

No matter how disinterested one of you might be in managing money, allowing one partner to control all the joint finances is bad for both of you.

A mutual understanding means you’ll both know what you can and can’t afford and that if something were to happen to one of you, the other would have an idea of their financial affairs.

Talk to your spouse or partner about money

It’s important to know exactly what’s happening with your money as a couple, so discuss your finances with your partner regularly and openly. This will help you both stay involved with household finances, manage your money responsibly and deal with any issues together.

Share, divide, pay an allowance or keep your money separate?

It’s up to you how you manage your money when you’re in a relationship. Generally speaking, there are four main ways you can do it:

  • Keep separate accounts
  • Share and manage everything as a couple
  • Share some responsibilities but keep some things private
  • The main earner pays their partner an ‘allowance’

You can find more information on how each method works below, but remember you’ll need to think carefully about which best suits your situation.

Keeping your money totally separate

If you don’t have a joint account, you’ll both keep your earnings separate. Any bills you share like the rent or mortgage need to be split on a case-by-case basis.

Here are a few ways to make sure you stay on top of your money when you’re managing it separately:

  • Plan everything and communicate regularly. That way you’ll always know what’s coming in and going out.
  • Decide how to split the bills. Whether it’s 50/50, or another way, you need to be clear on how you’ll split the responsibility.
  • Think about your partner when making spending decisions. You’ll be sharing the responsibility so make sure you’re not spending too much, otherwise your partner will need to make up any difference to pay the bills.

Sharing everything in a joint account

You can combine all your income into a single pot and use this for all your expenses from small, everyday things to paying the rent, mortgage and bills.

This can make budgeting a lot easier, but you’ll need a joint account for it to work smoothly. That way, you’ll both have control over the money and you’ll both be able to see what the other person is spending.

Here are a few ways to make sure sharing everything works well for you:

  • Make sure you have similar spending patterns, habits and behaviours – otherwise you’ll disagree and start arguing about money.
  • Agree a spending threshold between you – if you want to pay for something more expensive than the threshold, you’ll both need to agree to avoid an argument.

Dividing it up into mine, yours and ours

When you’re sharing responsibility for finances, a compromise could be the best way to go. You can open a joint account to take care of the bills, but keep your own accounts to pay for the things you individually want.

It’s a great way to make budgeting easier and keep some independence and privacy.

Here are a few things to think about when you’re deciding how to share the responsibility:

  • Decide which bills to pay from the joint account.
  • Settle on a contribution to pay into the joint account each month, whether it’s 50/50 or related to the size of your income.
  • Think about your spending patterns, habits and behaviours and agree what’s acceptable to both of you so you can avoid disagreements and arguments over money.

Main earner pays partner an allowance

If one of you isn’t earning, or earning less than the other, you could both keep separate accounts and have the main earner pay their partner an allowance.

The main earner can transfer an agreed amount each week or month to their partner’s account. You can both decide whether the amount that is transferred is money for household bills and spending money, or just personal spending money.

There are a few things to discuss before going down this route:

  • Make sure you both feel comfortable with the idea.
  • The allowance should not be seen as a ‘favour’ – if one partner is looking after the kids, or working as a carer – that’s a job too.
  • Talk about all types of expenditure that needs to be covered by the allowance and make sure the monthly or weekly amount is enough.

Don’t jump straight into the deep end

Sharing an account is a big step, so it could be a good idea to test the water before you go all the way and share everything.

Try opening a joint account with no overdraft facility and both contribute a small amount each month. Use the money to share the responsibility for one or two household bills to see how you get on.

After a few months, sit down and discuss it to see if it’s working well. If it is, you can increase your contributions and start sharing more of the responsibility.

If you’ve got a lot of money in savings, you might want to open a joint savings account where you’ll both need to agree before any money can be taken out. This is a good safeguard against one person dipping into the savings without discussing it with the other first.

What if you’re on Universal Credit?

When Universal Credit is rolled out, the way in which you receive benefits will change and you’ll have to decide whether having a joint account is best for your household.

What if your partner is spending too much money?

If your spouse or partner is spending more money than you can afford, it’s vital that you talk to each other. Sticking your head in the sand won’t make the problem go away.

You can find tips on talking to your partner about money on the Relate website.
If you’re ready to work together, you’ll find ‘Stop Spending – Tips & tools to help you fight yourselfopens in new window’ on the MoneySavingExpert website really helpful.

If talking just ends in arguments (and relationship problems can often be one of the main causes of comfort spending), you’ll need outside help from an adviser, a debt counsellor or even relationship counsellor.

If spiralling debt is the main problem, contact a free, impartial debt advice service – see Where to go to get free debt advice.

Protecting yourself and your family

There may come a time when you simply can’t see a light at the end of the tunnel. If that’s the case, you need to protect yourself and the rest of the family from the problems created by the over-spending.

Avoid joint debt

If you have any joint debts, remember that both of you are liable for repaying them in full. If your partner doesn’t pay their share, you will still be liable. So don’t agree to new joint debts unless you are entirely happy with the arrangement. In particular don’t agree to debts secured on your home.

Keep your credit card to yourself

Although credit cards can’t be ‘joint’, it’s common to have a main cardholder and additional authorised users. When an authorised user runs up an unmanageable bill, it’s still the responsibility of the main cardholder to pay.

So if your partner is an authorised user on your card, consider cancelling the authorisation.

Protect your credit rating

Being financially linked with someone else can affect your credit rating, and possibly make it difficult for you to get new credit. If you can, avoid joint bank accounts, joint loans and joint bills until your partner’s credit situation improves.

You should also check your credit reference files and get them amended or notes added to make clear that any financial association has been severed.

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