Managing Money as a Couple: A Male & Female Perspective

Money can be a divisive topic in relationships, but it doesn’t have to be. A recent survey from SunTrust Bank revealed that 35% of people blame finances for stress in their relationship.

In general, money can be a difficult topic to discuss between friends and family, let alone couples. Dealing with financial issues in a relationship can lead to conflicts, such as disagreements over how to budget money, secret spending, feeling shameful, and experiencing resentment. But regardless of your financial situation or relationship with money, it’s important to communicate and be transparent with your significant other about money.

We sat down with Merit Wealth Managers Kelly Gallimore and Max Baer to hear their advice on several hot money topics affecting relationships. We hope this discussion helps you approach a money talk with your partner this Valentine’s Day (and beyond).

The most common money issue among couples

It’s likely not surprising that money is a touchy subject among couples, but which money-related issue is the most controversial? It likely varies from couple to couple, but communication related to finances causes significant problems. Being transparent about spending and understanding a partner’s views on money is crucial.

Max: Life’s problems often disguise themselves as money problems. In many cases, this happens because each person has different priorities.

For example, one partner may want to celebrate a recent promotion by spending money. The other partner may want to save for their future together and sees spending as a signal that their long-term goal isn’t valued. As a result, lack of communication is a prevalent problem among couples regarding money.

Kelly: Many couples need more transparency in their relationship when it comes to finances. Self-awareness for each individual is also crucial.

Spenders vs. savers: can it work?

Are you a spender or a saver? A spender gets joy from spending money, while a saver takes pride in building a savings account. Can a relationship between a spender and a saver ultimately work?

Kelly: Because every financial goal has an emotional goal behind it, nearly every financial issue a couple faces will be charged with various emotions, leading us back to self-awareness, transparency, and communication. Whether you’re a spender or a saver, it all comes down to ensuring the other person’s goal has value and communicating that clearly to their partner. If two people are in a relationship, they usually share the same core values so they already have a strong foundation.

But how do those values manifest? What does that look like if they both want a secure future and to live nicely in the present? Put parameters around that and see where they meet in the middle to ensure both sets of values are being honored.

Max: You can also automate money movements and use multiple accounts to reach different goals. For example, you could have an account for vacation, a vehicle, retirement, etc. Then, if savings are automatically put into these accounts, the saver knows how much money is being saved, and the spender can see how much money is available to be spent, guilt-free.

Prenuptial agreements aren’t for everyone

Prenuptial agreements date back to colonial times and have significantly evolved over the years. These agreements began as a way for women to negotiate their marriages and weren’t related to divorce until after World War II. Today, couples sign prenups for various reasons, including insurance, career or business requirements, or inheritance reasons.

Max: A prenup or a postnup tends to focus on a possible end date for a marriage, which is never fun to think about. But, these agreements are one way to ensure the marriage is based on love and not money. Marriage is a commitment with real legal implications. Some couples need a prenup, but not every couple does, so discussing it with your financial advisor before any significant life event is wise.

Kelly: Financial advisors can help with many of these conversations and serve as an objective party. When it comes to a prenup, it helps to understand why this agreement is (or is not) important in your relationship. Knowing the reasoning can guide the conversation.

Are joint bank accounts the answer?

One major money decision couples face is where to keep their money: together, separate, or a little bit of both? What works depends on the couple, but there are generational trends. According to this survey, 49% of Baby Boomers solely have joint bank accounts, followed by 48% of Gen Xers, and 31% of Millennials.

Max: There is more than one correct answer here, and couples have made it work in various ways. A common choice is having a joint account for joint expenses (such as rent, mortgage, utilities) and then one account for each partner — known as the “Mickey Mouse” approach. The individual account can be used for gifts for each other or personal emergencies or experiences.

Kelly: The structure of a couple’s financial life should be what works for them. However, many factors go into this. Spending vs. saving, incomes, inheritance, and the level of transparency can all factor into having joint or separate accounts.

Systems for managing money

Systems for managing money as a couple can range from using financial apps or budget journals to methods for investing, saving, and planning. As we’ve seen throughout this conversation, there’s no single correct answer for how a couple manages its finances.

Max: Usually, one spouse is more interested in finances, which is normal and okay. The person managing the money in the relationship should be the one who wants to do it. But there still needs to be a middle ground, and both parties should be transparent about their financial decisions because you’re both working towards your shared goals.

Kelly: The system that works for a couple is best — no matter how simple or complex. Figure out what works best for you and stick with it!

Talking about money

A 2021 survey revealed that as many as 40% of Americans living with a partner don’t know how much their partner earns. In that same survey, 71% of the participants said they communicate well with their partners. The survey results show many couples aren’t being fully transparent about their finances, whether it’s related to the past, present, or future.

Kelly: Money discussions always come back to self-awareness — However, being self-aware about money takes work. At Merit, our clients complete a Financial DNA profile, which shows blind spots, strengths, and most substantial biases in an intuitive report. This helps couples understand much more about one another’s perspectives right from the start.

Max: Money is hard to talk about, no matter your past. But at some point, you do have to be open to this discussion. Before the conversation begins, set the intention to learn about and understand where your partner is coming from. Start simple and proceed without judgment.

Here are some questions you can use to help guide the discussion:

  • What do you remember about your relationship with money while growing up?
  • What are your future goals (personal, career, savings, net worth)?
  • Do you imagine your lifestyle changing in the near future?
  • What’s the dollar threshold in which a purchase needs to be a joint decision?

Life changes with time, and so do your finances and related goals. Money should be an ongoing, habitual conversation.

Dealing with an income gap

Household income inequality has increased by 49% since 1970, according to research from the University of Wisconsin. Over the decades, more women have entered the workforce while men transitioned from blue-collar jobs to white-collar careers. Both genders have seen a fluctuation in their earned wages and have had to deal with an income gap in relationships.

Max: Rarely do couples make the same income. But the size of the gap shouldn’t matter. What’s important is that the higher earner doesn’t weaponize money. Always remember you’re working toward your goals together.

Conversations about money can be charged because of its complexity — there are emotions, baggage, and circumstances to handle. But if you respect each other and approach it with love and understanding — and a financial advisor — it can go a long way.

At Merit, we specialize in helping couples and families achieve their financial goals. Don’t hesitate to reach out if you have any questions, need guidance, or are looking for some support navigating challenging financial conversations with your partner.

Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Merit Financial Group, LLC, an SEC-registered investment adviser. Merit Financial Group, LLC and Merit Financial Advisors are separate entities from LPL Financial.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized legal advice. Merit Financial Advisors and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.