September 29, 2022

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How to talk about and protect your money throughout your relationship

10 min read

How to talk about and protect your money at every stage of your relationship

Talking about money isn’t romantic, but it is important (Picture: Getty/ Metro.co.uk)

Whether you’re just starting out in a relationship, hoping to find someone to love, or have been together for years, it is likely that financial compatibility is not the first thing on your mind.

Perhaps we should be giving it more thought, however.

The Beatles famously sang ‘money can’t buy me love’, but it’s still true that the lack of it can ruin a relationship.

A recent study from investment group Hargreaves Lansdown found that over half of us would avoid dating someone with financial problems, with women the most likely to find debt a turn-off.

Within marriage, too, money can cause huge stress, with financial issues being the most common reason that marriages fall apart.

‘If someone is carrying big debts or struggling to live within their means, it could devastate their love life,’ says Sarah Coles, senior personal finance analyst at Hargreaves Lansdown.

‘It’s easy to see why daters aren’t keen to match with someone who will make their life more complicated financially.’

Amy Pethers, wealth adviser at financial manager Brewin Dolphin, says money can cause significant relationship issues, with her firm’s research showing arguments about finance are more prevalent among those in their thirties than older couples.

‘Talking about finances may be difficult for some, as our survey shows, but it’s a really important way of maintaining a healthy relationship,’ says Amy. ‘It can help you to set expectations, work through any issues, create a budgeting plan that suits both partners, and build a more solid financial plan.’

With this in mind, here’s how to ensure that your finances are a positive part of your love life, rather than the cause of its downfall.

At the start of your relationship

When you are scoping out a prospective partner or deciding if a spark of chemistry should be fanned into a larger flame, it seems unromantic to think about money.

That’s a mistake, says Sarah, at Hargreaves Lansdown, who recommends raising the topic of money early on.

‘Don’t wait until you’ve already committed. You need to know where you stand well before then,’ she says.

‘If it’s a struggle, start with one of the less scary aspects of finances, like whether they’re a spender or a saver, or what they dream of achieving with their money. It’s easier to ask someone to be open about money if you are willing to be, and it can help if you admit to your weaknesses, too.’

To find out if you are financially compatible, try doing a quiz such as the free one at sarahmccalden.com/sacred-money-archetypes-assessment, which will give you an insight into your money personality, and could help you understand your prospective partner.

It’s important to talk about money early on (Picture: Getty Images/iStockphoto)

‘It really helps if you know what your archetypes are,’ says money coach Sarah McCalden.

‘Imagine you’re a really good saver and you put 10{6e6db3521f07ebedc52abc8c7bfbbc5a7fcd8802a2a8a5c8cfaa0d09c6ebceb7} of your income away every month, and your other half doesn’t really care about money. All of these things might irritate somebody who’s a really conscientious saver type. It’s good to get to know who you are with, so that you can work on it. Because we are not all good at everything.’

Becoming more serious

Later in a relationship, if you move in together it can be tempting at this stage to pool your finances. However, Sarah, at Hargreaves Lansdown, urges caution.

‘While joint accounts for bills can make life easier, if one of you has a terrible credit record it can cause more problems than it solves,’ she says. Joint financial products such as bank accounts and credit cards create a link between your credit records. ‘It means that if your partner makes financial mistakes and runs up debts or misses payments, it will affect your ability to borrow.’

Instead, Sarah suggests setting up direct debits to ensure that bills are paid. ‘You can share direct debits fairly from both of your accounts on payday, or your partner can set up a direct debit to you and you can cover the bills. That way they’re the first thing that’s paid every month.’

If one of you owns the property and the other is moving into it, there are other issues to consider. If your partner makes financial contributions towards the property or mortgage, or helps to add value to your home, then they might be able to apply to the courts for an ‘interest’ in the property, should you split up. The courts would then decide whether they have the right to some of the value.

‘If you’re unhappy running this risk, consider drawing up a cohabitation agreement,’ Sarah suggests.

These agreements, which deal with how you will split assets if a relationship breaks down, can be drawn up by a lawyer, or you can download documents from online services such as Rocket Lawyer or Lawpack. Be aware, though, that if it is challenged in court, both parties will have to prove they’ve taken independent legal advice to ensure it is upheld.

Some couples choose to share a joint account (Picture: Getty Images/iStockphoto)

At the commitment stage

For more established couples, money talk needs to go further. Ensuring that you can buy a home and afford to have children may require longer-term financial planning, and will help you to be more financially resilient.

‘If, for example, you want to move to a bigger property in three years time, it probably makes sense to put this pot of money in a low-risk cash savings account,’ says Amy, at Brewin Dolphin. ‘That way, you won’t run the risk of your savings plummeting in value just before you need to access them.’

Brewin Dolphin research shows 38{6e6db3521f07ebedc52abc8c7bfbbc5a7fcd8802a2a8a5c8cfaa0d09c6ebceb7} of couples prefer to mix and match their finances by putting money in a joint account and keeping some separate, while 29{6e6db3521f07ebedc52abc8c7bfbbc5a7fcd8802a2a8a5c8cfaa0d09c6ebceb7} pool both incomes into one joint account and 27{6e6db3521f07ebedc52abc8c7bfbbc5a7fcd8802a2a8a5c8cfaa0d09c6ebceb7} keep their finances separate. Whatever you choose, the key is to be open about it, Amy says.

Personal finance expert Mary Elizabeth says her decision to pool money with her partner strengthened their relationship. ‘Even though I earn more than my partner we’re a team and play different roles in our overall financial health,’ she says.

‘By putting total income into a joint account and taking equal out, neither of us felt like the “money person” in the relationship and it eliminated potential power dynamics.’

Deciding to get married makes your financial decisions even closer, as lawyers are likely to conclude you are jointly liable for any debt taken out by one of you if you both enjoyed the benefit of any items purchased.

However, if your partner already has bad debt before you get married, you’re unlikely to be liable for this. If you are in this situation you may want to consider a ‘prenup’ before tying the knot. Even though these agreements aren’t legally binding, they are likely to be considered in a divorce court, providing you both sought legal advice before proceeding.

Taking the financial bull by the horns early on may ensure that money does not prove the sticking point in your relationship. But in the event of a break-up, our panel on the next page, ‘When It All Goes Wrong’, should help you with disentangling your financial affairs. No one wants to think about that on Valentine’s Day, of course — but in love, it’s better to be safe than sorry.



Case study: ‘If we trust each other, money can’t break us’

For Tina Nandha, 36, the money talk started when she first began dating Jay, who is now her husband. The couple, from Borehamwood in Hertfordshire, opened a joint bank account to split the bill evenly on dates.

‘We decided we would both put £50 each into this account per month and pay for date nights with what was in there. We evenly topped it up when needed and the dynamic worked so well for our relationship,’ she explains.

As the relationship grew and marriage beckoned, the couple changed the date night account into their wedding fund. ‘We paid 50/50 for our wedding, throwing out any age-old traditions,’ says Tina. ‘We wanted everything to be paid for equally by us, not by our parents.’

Tina and Jay set up a joint account soon after they started dating (Picture: Tina Nandha)

Both Tina and Jay, 41, have a banking background, and decided early on that their financial relationship needed to be based on trust. ‘My husband fully trusted me with his salary and our money. I would set up savings accounts and send money to it often and he never questioned anything. There were many savings accounts he didn’t even know about.’

And that trust became even more important when Tina left her job to care for the couple’s two young children.

‘His salary was the only salary we had and I felt so guilty using “his” money after contributing evenly for over a decade. However, we have always said that everything we have is ours, and “mine and yours” is language we rarely use, so he did well to remind me that I’m doing my bit for the family by being a mum.’

The couple faced hard times financially after this, and Tina says that when she left her job to start a business just before the pandemic, they found that they had far less to live on.

‘Money woes over the last few years have led to many arguments and could have broken us and our relationship. We had to work through many things together and thankfully have come out fighting.’

Although Tina’s gift-wrapping business, Wrap It By Tina, now has a strong online and in-person customer base, Jay remains the main earner.

‘He still contributes more and is extremely supportive of my business.’

Tina reviews the finances regularly, which she says is key to keeping the family on target.

‘I have a huge spreadsheet that I started in 2007 when we got our first mortgage and still use now. It lists every single payment that comes out of our account and I shop around to see which bank account can give us the best rewards.

‘The hike in bills has caused us to cut back further but it’s OK. I review our finances often to know what to change so we always stay afloat.’

Tina’s tips for other couples who want to find financial bliss in their relationship include having savings pots for different reasons, such as for leisure and travel.

‘Our holidays and spending money would be paid for in advance and we’d enjoy it guilt free.’

She adds that the biggest factor in managing finances in their relationship is that they both have faith in one another to do the right thing financially.

‘Trust is the biggest factor in our money relationship and as long as we have it, money can’t break us.’

If your relationship ends

When you split from a partner, married or not, the financial implications can be huge — especially when children and long-term assets are involved.

A married couple who are divorcing in England and Wales can reach agreement between themselves as to how their financial assets will be divided, or they can apply to court for a judge to decide.

Jim Richards, senior associate at law company Winckworth Sherwood, says applications for court orders are reaching their highest ever levels, suggesting many people are struggling to work this out for themselves.

A court will decide how to split the money, and whether ongoing maintenance payments will be needed for children. Some important matters to consider include the impact of inflation on ongoing payments, as well as the value of pensions where one half of a couple earns more than the other.

Divorce can lead to unexpected financial ramifications (Picture: Getty Images/iStockphoto)

If you are in a relationship that has broken down but you are not married, you may have fewer rights than you expect, warns financial planner Gary Smith at wealth managers Tilney. ‘It is a common misconception that people living together are protected by “common law” if they separate and need to untangle their belongings and finances,’ he says. ‘But this isn’t the case.

‘You don’t have automatic rights and you can end up in a really desperate situation.’ He recommends a cohabitation agreement before moving in together, as well as putting in place Powers of Attorney, especially if bills such as council tax or utilities are in one name only.

‘This will enable such bills to be paid and financial decisions also made if one partner is incapacitated.’

Where children are involved, it is also particularly important to make a will if you are an unmarried couple living together, because of the lack of rights you will have otherwise.

You will probably have to pay for legal help with a divorce or separation, although those on very low incomes can apply for financial help with mediation.

Mediation can be a cheaper and quicker way to deal with separation than going through the courts. For more information on mediation and to find a registered mediator near you, visit familymediationcouncil.org.uk.

The rules are different in Scotland, where you can still receive legal aid for divorce.

If you’re struggling financially and legally with a split, then Citizens Advice can help.

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.

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