You will have a happier relationship with your partner if you share your finances fully with each other—but half of Americans fail to do so.
Almost all of those questioned in a new survey by Ally Bank agreed that it is important that a couple be open with one another about their finances. Those who share their finances report that they feel not only happier but also more confident, more organized, and more motivated in their relationship as a result. They also are more likely to achieve their financial goals.Read More »
An additional 16 percent of those questioned in the survey keep their finances totally separate from each other.
Agreeing on money decisions
A significant part of establishing a happy future together is agreeing on decisions about money, says Andrea Brimmer, chief marketing and public relations officer at Ally Bank. This applies whether you are married, are partners, or even are dating, she adds.
After all, disagreements over finances can easily shake a romantic relationship. It is better, advisers agree, that a couple should be open about all their financial affairs with each other than keep each other speculating about where and how they might be spending their money.
To discuss financial affairs can be uncomfortable for some couples who are in a relationship, Brimmer adds. The reason: People handle spending, saving, and budgeting differently, she explains.
There can be no question, however, that handling finances jointly is where you eventually need to be.
Tips to keep your financial relationship strong
Here are tips from Ally Bank to keep your financial relationship strong.
• Establish a foundation of trust and respect
Sharing your money details with a partner can sometimes be upsetting. You worry over how they will react to your subpar credit score, student loan bills, or the wasteful way that you have spent some of your money.
If you feel uncomfortable in opening up yourself financially, it is probably best to wait a while before you do so until you have built a foundation of trust and respect between each other.
• Start off slowly
The greatest challenge is to start a conversation about each other’s money—assuming you have never discussed it before. You might start by discussing one aspect of your finances, such as your credit score or an error you made in your finances, during dinner one evening.
Watch your partner’s reactions to determine whether your partner is critical or understanding of your situation.
If you feel insecure in disclosing even a small part of your financial situation, start by discussing how your partner feels about finances in general and how important some issues are. If you sense discussing even a fraction of your finances could cause a disagreement, stop talking about finances and revisit the topic in another way on another occasion.
• Remember your value in the partnership is not financial
If you earn a lot less than your partner, you might feel insecure about your contribution to the joint finances. Should you be earning less, check how secure you are in your work and career.
Should you be the one who brings in more money, you should not feel that you need to have a greater say in how the household finances are spent simply because you earn more. To build trust in a partner who earns less, indicate that you value your partner’s contribution and input into your joint finances no matter what each partner’s income is.
As long as you build a foundation of trust and respect in your relationship, you should believe that your partner will support and love you regardless of where each one is financially.
• Stay informed
Even if you are the partner who manages the household finances, you should still discuss them openly with your partner. It is important that each is able to access the other’s financial accounts online.
Again, the foundation is to show trust and respect for each other by each having complete access to the other’s financial information.
• Join forces
By combining your finances and deciding together on how you use them you will build a joint foundation that will be stronger.
Whether it is taking a second honeymoon or investing jointly for retirement, you will be more likely to achieve your goals. Remember that couples who jointly manage their finances are more likely to reach their goals than those who do not do so.
A reason managing your finances jointly works is that by working together you both become accountable and you support one another. These aspects remain true particularly when you are trying to reach a specific goal and have to sacrifice together in order to achieve it.
• Use smart banking tools
Using today’s banking technology, you can work together financially in various ways. Among them is to save toward a variety of goals using one account. Some banks offer you the ability to open different folders in a savings account to do so.
In that way, you can plan and work together—and have a happier relationship as a result.