Many of us find it difficult to stay on top of our personal finances. When our monthly bank statement drops through the letterbox, we can be shocked at the amount that’s left in our account, leaving us wondering what on earth we’ve been spending our hard-earned cash on!
When you and your partner get married or enter into a civil partnership, it’s important that you start managing your finances together and make financial plans for the future.
Bear in mind that one of the biggest causes of relationship problems, in general, is finances. By planning ahead and identifying what you need to spend money on together as a couple could help prevent some of these arguments from occurring.
Start with a budget plan
To get a clear picture of what money you have coming in and how much you spend, why not create a budget plan with your partner?
Your budget plan can include your yearly and monthly income, how much you need to spend on food, bills, travel and other essentials as a couple. Deciding on what’s essential is the source of many disagreements between couples, so don’t be surprised if you don’t see eye to eye.
Once you’ve identified the fixed costs, you can look at what you have leftover and decide how much of that will be put into savings and how much can be used for more flexible purchases.
Find out more about creating a budget plan and download our free budget plan template here.
Open a joint bank account
It’s worth opening a joint bank account for savings and household payments, that way if the other partner dies the account, and whatever is in it automatically becomes yours. Whatever is in your personal bank account cannot be accessed by your partner and vice versa.
Remember to keep a line drawn between what you use your joint and personal accounts to pay for. You may think that something like a cushion is essential for the household, but your partner may not see it the same way. Keep the lines of communication open and discuss with your partner before making spur of the moment purchases.
‘If one of you has a poor credit history, it’s not normally a good idea to open a joint account,’ advises Jane Symonds, Head of Service Delivery at the Money Advice Service. ‘Having joint finances with someone who has a history of bad debt may affect your credit rating. Just living with someone, or being married to them, will not affect your credit score but as soon as you open a joint bank account or take out a mortgage together, 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.’
Dealing with debt
Although we do tie ourselves to the fortunes of our partner when we get married or civil partnered, we are not responsible for the debt they create.
‘If you have an overdraft on a personal account or borrow money under your own name, getting married makes no difference to who owes it – you will still need to repay the money yourself and if you fail to repay your partner cannot be pursued,’ explains Jane. ‘However, if you borrow money jointly as a couple, you will normally be jointly liable with your partner for the full amount. If you stop paying, either of you could be pursued.’
As mentioned before, money is one of the main causes of arguments between couples. But often, when we argue about issues such as money, there are deeper issues below the surface. Find out more about these hidden issues by watching our relationship insight.
For more help and advice about money and relationships, visit our Money section.