How to manage your finances in a relationship

Tips on how to manage your finances as a couple.

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Financial issues and stress play a significant role in couples separating. In fact, studies by Relationship Australia have identified financial stress and money worries as key issues for separating couples.

So whether you're opening a joint account, moving in together or investing your savings into a home or business with your partner, it's smart to do so with a good understanding of both your money and your relationship.

Talking to your partner about finances

Every couple tends to have those who spend and save differently. Regardless of what you tend to do with your money, it's always good to be on the same page as one another.

Talking to your partner about money then, is important. Here are some important questions worth discussing with one another:

  • What are your relationship expectations and goals? Whether you want to get married, buy a home and have children, or see the world with your other half, you should put a financial plan in place that can help you achieve your goals.
  • Who is responsible for the finances? While one person looking after the money may work for some relationships, it can be helpful for you both to share the burden. It also means you both know what your current financial position is.
  • What is your current financial situation? Assess your current situation, looking at your income and expenses. Look at ways you could work together to save for the future and reduce debt you might have.
  • Do you tend to save or spend? Whether you prefer to spend or save, it's really about finding a balance and most importantly, coming to an understanding and agreement with your partner.

Actions you can make together

Money and relationships can get tricky, especially if you don't take action early. But that doesn't need to be the case. Once you're both serious about your relationship and committed to one another, there are a few important steps you can take to ensure money doesn't become a problem.

  • Get a life insurance policy. Life insurance protects you and your partner should one of you die. In such a sad time, it ensures you don't need to worry about things like income replacement, mortgage protection, funeral expenses and more.
  • Share costs and bills. Regardless of who earns more, it's important you speak to one another and come to an agreement. You're in a relationship and should both have equal say about where the money goes.
  • Joint assets. Put joint assets and liabilities like your home loan under both of your names. This means you'll both have equal ownership and responsibility for payments.
  • Shared health insurance. You can often save when you take out a couples policy with private health insurance. If you're sharing your income, making sure you both have private health insurance also ensures you aren't hit with a large hospital bill should something happen.

Types of shared finances

There are a range of ways you can share your finances with your partner. These include:

  • Joint bank accounts. Joint bank accounts give you and your partner access to the same account. Trusting your partner and being respectful of one another's income is an important part of money and relationships. They can be a great way to save together and make paying bills much easier.
  • A shared account for shared bills. If you prefer, you can keep your money in separate accounts and open a shared account for shared bills. This can be good for some relationships that want more financial freedom.
  • Joint credit cards. You'll be equally liable for repayments to a joint credit card. If you both trust one another, this can be a good way of paying for things. Remember though that if you can't repay it, it will affect both your and your partner's credit rating, regardless of who used the card.

Did you know?

A recent 2019 survey by Relationships Australia illustrates the extent to which financial matters are not part of the conversation when it comes to our relationships. Take a look at these stats:

  • Only 37% of respondents said they discuss their personal financial situation with their partner.
  • One third of respondents hadn't spoken about their personal financial situation before they committed to their most recent partner. The same was true of financial priorities and goals.
  • Men (36%) were more likely to ask about how individual incomes would be shared than women (31%). However, 43% hadn't even spoken about how their own incomes would be distributed before committing to one another.
  • Over half of respondents (56%) reported they hadn't considered how they would cope with their money and finances if they were reduced to one income.
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