Me, You, and We: Money and Relationships
Are You and Your Partner on the Same Page Financially?
A couple of years back, we had an unusual phone call from a non-client:
“Hey, can I bring my spouse in?”
“Sure, what’s on your mind?”
“I need you to tell them to not spend so much money”
“Um, It sounds like you might be looking for a counselor”
“Maybe, but would you sit down with us?”
The couple never showed up. I doubt they found a counselor either, because (we found out) 2 months later they did keep a meeting with the divorce attorney.
“Talk money like a team, or money will end the team”
- James Sexton, Divorce Attorney
Fewer beginnings, Fewer endings
Marriage rates peaked in 2000, when 8.2 out of every 1,000 people got married. By 2023, recorded marriages had fallen to 6.2 per 1,000 people (a 25% decrease). Divorce rates also declined: after peaking at 50% in 2008, they are now closer to 40%.
Today, more couples are choosing not to marry… But they’re still cohabiting, combining households, and blending families. Money is still a huge factor.
Managing Money Together
Whether you are married or not, combining money and managing shared finances is daunting. Getting on the same page means clearly addressing a few key points.
1. Find Out What Money Means to Each of You:
Money means different things to different people. For some, money represents freedom, control, opportunity, and security. Understanding your partner’s (and your own!) financial background can go a long way towards explaining their attitude and spending behaviors. It’s unlikely to mean the same thing to both partners.
2. Discuss Incomes and Outcomes:
Each person approaches budgeting, saving, spending, and investing uniquely. Shared accounts are great when partners are aligned, but awful when there are competing expectations. When that’s the case, consider “You”, “Me”, and “We” accounts. Putting shared expenses (and income) in the “We” account can mean flexible, unscrutinized spending from the “me” finances.
3. The 5 W’s of Money Responsibility:
There’s no one right way, but there should be a system in place with clearly defined roles. Knowing where the money is, how it’s invested, and how/when bills get paid (and by who!) can keep surprises away.
You love your partner and probably have a lot in common. Here are some things you may not have in common:
Investing styles
How/When to give money to the kids
Retirement timelines
Risk tolerance
Comfort levels with debt
Saving habits
Spending habits
If that’s not complicated enough, one or both of you may also bring debt, alimony, or child support obligations to the table along with all your expectations. So talk about it!
Sharing the good, the bad, and the ugly of your financial lives can help you decide whether to combine finances, who will manage spending and saving, and how your personal goals fit together. Even a clear disagreement is many steps ahead of a vague understanding of your partner’s expectations.
Common Discussion Points With Couples and Money:
Whether couples are marrying, remarrying, cohabiting, or blending families, the financial conversations tend to fall into a few key areas. Below are a few more questions or topics we hear regularly:
Will you split your mortgage and bills equally, or another way?
Will you be using the State’s Prenuptial Agreement or one of your own?
If you are under 65, what health insurance options are available, and what makes the most sense?
Do you need to update beneficiary assignments for retirement accounts and/or insurance policies?
What happens to your kids’ share if your partner leaves and remarries?
If you die, what are your legacy wishes for family, friends, and charities?
Do you need to update your trust and will?
What assets are separate and which are commingled?
Is there an age difference between you and your partner? Whose life expectancy are we planning for in retirement?
No matter where you land, it can be helpful to talk with a financial professional about ways you can share finances.