How do you manage your money well as a couple?

Putting everything together

Some couples decide to open a joint account and put all their income together, no matter how much each earns. It is from this “shared pot” that the couple pays for their expenses.

For some couples, it works well. For others, it leads to conflict, for example if one partner feels that the other is taking advantage of the joint account to overspend.

In the event of a separation, it can also be difficult to prove who paid for what and who bought this or that.

In itself, opening a joint account is not a bad thing. But, generally, it is a good idea for each member of the couple to also keep a personal account to have some financial autonomy.

Distributing expenses according to each person’s salary

In other couples, the approach is to look at how much each person earns compared to the other.

If one partner makes $30,000 and the other makes $60,000, the second partner will contribute twice as much to the expenses. In other words, everyone contributes to expenses in proportion to their income.

Many people feel that this is the fairest way to manage money as a couple, especially when the partners’ incomes are very different.

Separating 50/50

In this case, the calculation is very simple: each spouse pays exactly half of the common expenses.

If the couple decides to use a joint account, this means that each partner deposits an equal amount each month.

The 50/50 approach is often used when the incomes of both spouses are similar. On the other hand, if there is a large gap in their incomes, the spouse who earns less money may have difficulty maintaining the lifestyle that his or her partner can afford.

What about debts?

There are debts that are personal and others that apply to the couple. Before signing for a large loan with your partner, take the time to think about your couple’s current and future situation.

Personal debt

A personal debt involves only the person who signed the contract. The spouse is not responsible for it, regardless of whether the couple is married.

But beware, if the spouse has endorsed his or her partner or co-signed a loan application, he or she is also responsible for 100% of the debt (and not 50%, as some believe).

If your spouse is having money problems and you are thinking about taking on the responsibility, it is important to ask yourself if you would be able to handle the consequences if things go wrong. You may have to make the payments on their behalf if they can no longer do so. Also think about the fact that endorsing someone increases your debt ratio, which could affect your credit rating. Above all, remember that there are different ways to help a loved one struggling with over-indebtedness.

Joint debt

A joint debt is a loan made in the name of two people. If one of the two can no longer afford to repay the amount borrowed, the other becomes responsible for paying off the entire debt.

Joint account vs. personal account

This is THE question that every couple ends up asking themselves sooner or later: do we open a joint account or do we simply keep our personal accounts? Each option has its advantages and disadvantages.

A joint account

• Allows you to track the couple’s expenses.
• Is a good solution if both partners agree to pool their money.
• May require some oversight (or trust), as each can draw from the joint account as they wish, without consulting the other.

Personal accounts

• Allow tracking of each partner’s expenditures and contributions.
• Allow each partner to make personal expenditures from their own account.
• Are a less practical solution if the couple has a lot of common expenses.
• May increase the burden of tracking and sharing expenses.

Why not opt for a mixture of the two?

This is probably the best system because it is balanced: you maintain personal financial independence while sharing certain expenses with your partner.

But no matter how you decide to manage your money as a couple, the important thing is that you discuss it. It is by communicating well that you will be able to find a solution that suits you.

Are you stressed about talking to your partner about money because you’re going through a difficult financial situation? Remember that there are professionals who can help you. A financial recovery advisor can help you get your finances in order, without judgment and without any obligation to you. Book an appointment to discuss your options.