Joint Finances - Is Your Relationship Ready?

The decision to share finances is as huge as the decision to become cohabitational in a relationship. This can be a deal breaker or a partnership maker depending on how it goes. Here’s some tips on how to make the decision together, and how to make that decision work for you.

One of the first things you need to do is figure out how you both are inclined to view the bills. There are a few different ways new couples view joint finances.

One way is the “Then & Now” way. The “Then” bills would be the ones you’ve each arrived with: your student loans, your car payment, your credit card bills. Charities you’ve chosen to support. Your insurances and investments, your obligations and any other loans or debts. The “Now” obligations would be the ones you currently have together: Rent. Utilities. Food.

Another way to view your bills is what I call the “Agree & Disagree” way. The “Agreed” bills and obligations would be things you both feel are worthwhile. He may feel your student loans were a good investment into both your futures, and agrees that this is a valid bill and doesn’t mind sharing in the payment of it. However, he may feel her $25,000 in credit card debt is not an investment, it isn’t a worthwhile bill, and he does not agree to help you pay it off.

This one isn’t as cut and dry as the previous way. Even the current food bill may incur disagreements. She may not want to pay half of a food bill that includes a lot of junk food, red meat, and snacks, since she eats nothing but Jenny Craig and salad anyway. He may not agree with the utility bill because he’s constantly turning the heat down, and she’s forever turning it up.

That’s going to involve a real conversation. Make a list of all the bills, and all the income, and sit down together over a pot of coffee and honestly discuss this. Look at each bill and honestly say how you both feel about paying it. It might surprise you to find out you have a problem paying for some and not others.

After this conversation, you should be able to figure out whether you’re looking at the bills from a “Then & Now” or a “Agree & Disagree” way. She may be one, he may be the other As long as you understand the motivations behind the feelings, this shouldn’t be a problem.

This exercise is to learn and understand your thought processes. Going forward from here, you need to try to work together to understand how to balance them out.

The income that you are both bringing into the situation will be a huge factor in proceeding from here. Look at the bills you each have resentment toward paying, and look at your incomes.

If you resent having to pay her credit card bill, which may be for example $300 a month, yet she earns $600 a month more than you do, you can pretty much see that her extra income covers this bill, so in essence you have nothing to worry about.

In most cases though, this won’t be quite as easy and simple as the above example. There will more than likely be a whole list of factors, pluses and minuses.

Agreeing to pool all your money and resources, and debts and obligations, means you are agreeing that you’re equals in incoming and outgoing monies and contributions.

For many couples, that is where the problem occurs. They don't understand or appreciate the total value each brings to the table. There are many factors. Before anything becomes an issue, discuss them.

Here is a very rough example of what I mean:

Let’s say, she’s an accountant, and he’s a car salesman. Her office is in the house. He commutes to work. Since she doesn’t commute, she has more time than he does to invest into housework.

When they look over their bills and their income, they need to consider that they each have a low car payment because of his work. They don’t have to pay a year end tax accountant to do their taxes because of her expertise. They have to consider that she puts more time into the cooking, cleaning, laundry, bill paying, and other household commitments.

Everyone has assets and liabilities.

Does this sound too businesslike for you? Would you prefer not to compare all these details?

I’m all for that. My husband and I didn’t nickel and dime everything when we made the decision to live together and join our finances. We were in love and committed to our future. It didn’t matter who did more housework, or who earned more. It didn’t matter who came into the relationship with debt. It didn’t matter who drove what or did what, or had what.

But not everybody feels that way.

Friends of my husband’s got married just before we did. Their finances were separate, and are still separate to this day. Maybe it’s because he came from some money and she didn’t. Maybe it’s because he has a much different and stronger work ethic than she has. Maybe it’s because he is much more materialistic than she is. Maybe, at least in the beginning, there was a trust issue. It was always odd to me that she pay one bill, and he pay another, and neither seemed to know exactly what was in the other’s checking account.

I do know that they are still married. And I also know that money has always been a constant source of soreness between them. They seem to disagree fundamentally on what is important, and what isn’t. And this is revealed in the way they both view and manage money.

Verbalizing that you have an issue with this bill or that debt may be enough. Maybe one of you just needed to express their feelings on it. Sometimes acknowledgement is all you need.

Maybe one of you really isn’t as much of a team player as you had previously hoped. And maybe, as it turns out, it just doesn’t matter. Knowing this when you’re going in, is the best way to deal with whatever crops up.

I’ll give personal examples here. His family is huge, and mine is tiny. Christmas/birthday/baby gifts for his side are just out of control. I don’t feel good about spending so much on them. But guess what. It’s his family. There is no getting around that. I get to express that once in a while, and that’s the end of it.

While my husband is extremely charitable, he is not quite the sucker that I am. I tend to give to the charities I support a bit more than we can afford sometimes. He will look at the receipt and say, “We agreed to donate $ X dollars, and you gave $ XXX dollars.” He has every right to be annoyed. We made an agreement and I broke it. And I explain how I gave extra because of the dogs rescued from a shelter that closed… And he always says, he can’t be upset at me for something I do with my heart. It’s part of why he loves me. Maybe he thinks of it as “my” family.

In any case, these things balance out in a good partnership, one way or another.

Having this conversation with your partner is a great way to understand each other’s values.

You might be surprised at some of the revelations that will come from this heart – to – heart discussion.

I’ll give another personal example. I spend some serious money on beauty and fashion. Don’t get me wrong, we can afford it. But it is probably more than some people spend. I get my hair done, I get manicures and pedicures. I buy good skin & hair care products, and cosmetics, and update them often. I update my wardrobe constantly, and spend on good high heels, pretty outfits and sexy undergarments. I just love it. I am what some would call, high maintenance.

Many men would look at the $$$ and say, “Are you out of your mind??” But in my relationship, my husband LOVES that I dress up every day. I do my hair and make up, I really enjoy feeling girlie and pretty. And this happens to be something he enjoys about me too. He loves the Victoria Secrets and designer high heels and my nails being done all the time. He does not see these expenses as a burden to our budget at all. He sees this as “gifts I give him every day.” – Yup, that’s a direct quote. I come home from the salon and he doesn’t ask how much. He says, “Thank you for spending your afternoon being beautiful for me.”

Communication is the key. Express your feelings on what expenses you don’t feel OK about, and really listen to their feelings as well. Try to get to the motivation behind these feelings.

Agreeing to disagree about some things is fair, honest and workable. He doesn’t like that you spend so much on unhealthy food and shoes. She doesn’t like that you spend so much on luxury items like porn, or car accessories. But as long as you both realize that somehow in the larger scheme of “who–does-what, who-makes-what, who-spends-what,” it basically all balances out, then there shouldn’t be any resentment.

If you liked this HUB, please click the Thumbs-Up below. Thanks!

*All text is original content by Veronica. All photos are original content by Veornica, OR used with permission. All videos are courtesy of Youtube.com.