3 Ways Couples Can Work Together on Finances

In both married and unmarried couples who have combined their finances, one partner often has more experience with or interest in the household’s finances. While the default arrangement in these cases might be to let that person manage the money on their own, keeping both partners involved can often be a more beneficial approach.

Working together can strengthen your relationship and prevent disagreements over money, one of the leading causes of divorce. It can also reduce the risk of serious financial problems for the non-money-managing partner in the event of their partner’s death or disability.

With this in mind, here are three ways couples can work together to manage their financial life.

Communicate, Regularly

Nobody likes bad news about money. Negative surprises can lead to exaggerated emotions, which may complicate and amplify other issues in the relationship. Good news about money, such as receiving an unexpected bonus or a large raise, can also strain a relationship if expectations get inflated beyond reality. Open communication can help prevent surprises and keep a couple’s expectations realistic and in sync.

Weekly or monthly check-ins are a good idea, with the frequency depending on how much is changing in your financial situation. Sunday morning over coffee can be a good time for a low-key conversation about what’s going on with work, how the company’s stock is doing, the timing of any upcoming large or unusual expenses for home repair or vacations, how you’re tracking against savings goals or the expense budget, and other routine items.

Occasionally, you might also touch on how you’re progressing toward longer-term goals, such as saving for college or retirement or the next new car purchase. Also, at least once a year, schedule an hour or two for a deep dive to review your net worth statement and annual budget or savings goals.

Share the Responsibility

Sharing responsibility for the day-to-day management of your household finances can strengthen your partnership in financial decision-making. It also keeps the job from becoming an overwhelming burden for one partner—managing day-to-day household finances can be a surprising amount of work.

Alongside other responsibilities, someone has to pay the bills once a week; monitor investments; pay attention to employer benefits such as health insurance, stock plans, and retirement accounts; renew life, homeowners, auto, and liability insurance; and possibly take care of rental properties. It’s a lot to do.

To spread the effort and make sure both of you understand and feel jointly responsible for your financial decisions, it can be a good idea to explicitly assign each task to one of you, making sure to balance the load. Your roles can rotate over time, maybe every couple of years, to ensure both partners get comfortable with all aspects of the household finances. The assignments can also change as needed depending on external time commitments for work or family.

Define Shared Goals

Defining and working toward shared goals may be the most important aspect of maintaining financial harmony in a relationship. Because money is a limited resource in nearly all households, the process of defining shared financial goals is essentially the process of deciding how best to use a limited resource. Goals must be prioritized because there usually isn’t enough money to do everything a couple would like to do.

For example, one of the larger goals that married and unmarried couples can set is when to retire. Generally, the earlier a couple wants to retire, the more they must give up in the interim to reach that goal, and difficult trade-offs might be involved that need extended discussion. For example, should funding college for the kids take priority over early retirement? Is it worth cutting spending now in order to retire years earlier?

Reaching agreement on a common goal such as early retirement provides shared direction around that goal. It can also help prevent or resolve other sources of financial conflict by encouraging healthy behaviors that partners are likely to appreciate in each other. For instance, if one person is a saver and the other is a spender, agreeing on an early retirement goal can help the spender spend less, but not feel deprived, as they work toward that positive goal.

It can take a long time to come to agreement on a set of goals, or find an accommodation if you can’t reach agreement. Defining your goals can involve ongoing discussion over months, and often years, with each person having an opportunity to explain what they want to accomplish.

You don’t have to agree on everything. And your views may change over time. As with most aspects of a relationship, good communication is key and will help you navigate areas of disagreement. Each person should feel that their partner hears their point of view and understands where they’re coming from.

Quantifying the trade-offs required to reach a particular set of goals is an area where involving a financial planning professional can also be helpful, particularly if you’re having trouble coming to agreement. A detailed financial model prepared by a financial planner can assist you in determining what goals are feasible in your situation. Maybe best of all, financial modeling can provide an objective answer and defuse any potential conflict, because math doesn’t take sides.

Working together on finances requires some effort—but it’s absolutely worth it. When you and your partner commit to working together in this way, you invest in both your relationship and your financial future.