Handling Finances as Partners / Couple
Sensitive topic!
A lot of things play a part to nurturing a blooming and happy partnership between couples. One of which, if not the most important for long term longevity, is the way finances are handled.
I can’t count how many times my wife and I have fought over finances prior to this due to the different money mindsets that we have. Heck, we still do (sometimes) nowadays. So, if you are one of those who sometimes argue with your partner because of finances, you’re not alone.
Don’t take my word for it, it was highlighted in New Straits Times before that nearly half of the divorces in Malaysia was due to financial problems. AKPK mentioned before on radio sometime back that couples’ relationship is strained due to financial issues. I also have a close relative who divorced because of financial issues.
I’d like to share on my journey to this point. I can’t say that we’ve perfectly fixed it, but we have managed to reach an understanding. Which is the first step.
Seek to Understand
A lot of the break down and failures in humanity boils down to communication. The same can be said here.
When we first started off, we were polar opposites on finances. We just could never see eye to eye when it comes to money. For example: She would expect the guy to pay for everything, whilst my thinking is more towards equal treatment (add in pamper moments here and there). She will consider only the value of things without regard of budget and I would always put budget first.
After a few headbutts and heated arguments, we decided to talk it out. It took a few sessions, but slowly we understood each other and the money principles that is ingrained in each of us. It’s like North Korea and South Korea finally getting together to talk it out and accept that they will handle things differently, all the while the thumb is on the nuclear launch button (TENSION!).
It became a sharing session whereby we accept that we are the way we are and we can’t change it, at least not in the short term. It’s about seeking to understand the other party, not to instill or impose anything to the other party. There is no better or worse principles, just different way of looking at things and handling things.
Once we came to an understanding, we have 2 paths to choose from:
- Face and overcome it
- Kthxbai… aka go our separate ways
Choose our paths
The 2 paths are very different.
A lot of people choose a 3rd option – ignore and continue – which is detrimental to the future. It’s like a plague that eats away our very souls as we move on without confronting this issue. A great deal of divorces happen because of financial issues. Whether we like it or not, EVERYTHING we do revolves around finances. This 3rd option only delays the inevitable and when the time comes it is most likely the “kthxbai” option.
As we started to understand our differences, we decided that it may be best that we have 2 vastly different mindsets. I mean, she’ll always buy me presents! [Yes, I get the better deal out of this, but I make sure our future is secure. Shhh…]
We agreed on a few things in order for us to move forward.
Roles & Tools
(1) Roles
We took the best of our traits and assigned roles that we play when dealing with finances.
I am, obviously, the Chief Financial Officer (CFO) of our relationship. That means that when it comes to budgeting, planning, investing, it’s my job to look into it.
I handle our money.
She is the Chief Visionary and Operations Officer. She handles all the dreamy spending ideas and daily spending needs.
(2) Tools
The best tool that we implemented in our relationship was a joint account (& joint expenses sheet to record all ins and outflows)
- Firstly, we chose a High Interest Savings Account (HISA) to open as our joint account.
- Then, we looked into our monthly spending habits in the past and came up with an amount that we would need (+ some buffer) and set it as a monthly deposit into the joint account.
- We deposit the agreed amount into the joint account monthly like clockwork (she uses standing instructions, I do it manually as part of my “wealth distribution activity“)
- All our joint expenses will be spent using that fund. This includes our meals together, travel expenses, gifts for our family and friends, housing expenses, etc. (Of course, often times we spend from our own personal cash / card first and claim it back from the account the next month as it is more convenient)
- We will adjust the deposit amount if spending patterns changes and the deposit amount does not have to be 50/50. The golden rule here is to talk it out and agree.
This serves a few purposes:
- We have a joint account for our spending as a family
- This also means that we have our personal accounts for our individual spending (e.g. she wants to buy her dresses, I want to buy my gadgets)
- We start to accumulate wealth together through this joint account together and it could contribute for future heavy lifting, such as renovations, kids’ expenses, etc
In the end, the tool works because of the trust we have in each other. That is the foundation for this to work.
Closing Thoughts
This has worked for us thus far. We have fewer arguments on finances (still do on some philosophical ideas).
She can spend on what she like and I can spend on what I like without us poking too much into our individual spending habits or jeopardising our joint spending as a family.
We are also happily seeing our fund in our joint HISA grow monthly. Finances can be a pain to manage together, but it doesn’t have to be so. Try it out.
A word of caution: There can not be 2 people managing finances when it comes to a joint finances, just like how you won’t have the CEO, COO & CFO of the firm managing the finances of a company. It all boils down to the responsibilities of the CFO and we trust them to best handle the finances for the group.
How do you manage your finances with your partner?
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