In my experience, money management for couples is more complicated than the sum of its parts.
Fresh out of college, my boyfriend and I knew that we wanted to get married. Unfortunately, we were in no position to afford a wedding. Neither of us wanted to live with our parents during our pre-engagement, but we also didn’t want the expense of living alone. So we decided to join the growing population of cohabiting couples.
When we moved in, we agreed to split rent and utilities evenly from our separate bank accounts. Our circumstances seemed simple. We both had jobs with steady salaries. We weren’t opening a joint account or making any major purchases. What could go wrong?
As it turned out, everything could go wrong. Our quick check-in didn’t cover half of the issues that would eventually crop up.
Here are the five biggest financial mistakes we made when we moved in together—and five ways to make sure you don’t do the same.
1. We let him take charge of utilities
Mark took our shared bills in his name, so I never knew when they were due. While I kept a careful budget for day-to-day expenses, I wasn’t as diligent when it came to paying the bills. Rather than being proactive, I would wait for Mark to ask for my share, which I later found out made him uncomfortable. He would pay my half while he worked up the nerve to ask me for the money … and him paying for me made us both uncomfortable.
How You Can Do Better: Once I had a rough estimate of how much I owed in utilities every month, I started paying them in advance. At the first of every month, alongside my rent check, I’d give Mark one lump check for my share of the bills. Treating bill pay in this businesslike way made it easy for me to remember to pay on time, and took the pressure off of Mark. Lesson learned.
2. We didn’t consider how our spending affected each other
Since our accounts were separate, we often failed to consider how our financial decisions impacted each other. For example, I once pitched Mark on a trip to Costa Rica to celebrate an exciting new career move. While Mark agreed to go, he later told me the trip put him into $1,000 of debt that took him four months to pay off. I felt terrible.
Yes, he chose to spend his money, but he clearly felt coerced. When I confronted him, he explained to me that the emotional high of the situation made him feel cornered into saying yes. Since I always speak up when I can’t cover costs, it never occurred to me that he wouldn’t.
How You Can Do Better: Recognize that no matter how separate your bank accounts, your shared lifestyle will affect your partner — and not having access to each other’s finances means not knowing what they can afford. When you want to share an expenditure, make sure it’s something you both feel comfortable with. Consider suggesting a handful less expensive options, and emphasizing the fact that the purchase is optional.
And remember: If you find yourself in the awkward position of being unable to afford something your partner wants you to buy, it’s up to you to speak up.
3. We assumed we wouldn’t face any serious money problems
A few months after we moved in, Mark quit his job. I tried to stay cool, but on the inside, I was panicking. I was already living paycheck-to-paycheck with only a few thousand dollars in savings—would I be able to support us both if he couldn’t find work? We had never planned to merge finances before getting married, so what would I do?
How You Can Do Better: Having his-and-hers emergency funds would have alleviated a lot of my panic. An emergency fund is a savings account holding (ideally) six months of net pay, to be used only in dire situations:
- You’ve lost your job, and need to continue paying basic living expenses
- You have a medical or dental emergency
- Your car breaks down and is your primary form of transportation
- You have emergency home expenses—i.e., your A/C breaks down in 100-degree weather, your basement floods, etc.
- You have bereavement-related expenses, like travel costs for a family funeral
In the end, Mark got a new job in only three months—but the stress of those three months taught me the importance of emergency funds. Since then, we’ve never gone without one.
4. We didn’t compromise on our spending habits
Mark and I have different spending priorities. I am a “saver” by nature but am willing to spend on travel and other big life experiences. Mark likes making day-to-day life special, preferring to spend on things like organic groceries and date nights.
Over time, watching my travel fund disappear into farm-grown strawberries and game tickets, I began to feel resentful.
How You Can Do Better: It’s important to keep your goals in mind. If we had determined and pursued specific savings goals together (say, saving for a down payment on a house) and contributed to those equally, I would have felt comfortable with what we were saving, and felt less conflicted about his daily spending.
5. We thought one check-in was enough
After three years of living together, we were ready to get married. We established a wedding budget, which we intended to split 50-50. Since we would soon merge our finances, I started seeing all of that wedding money as not “ours.”
If Mark went into debt paying for his half of the wedding, that debt would soon be mine, too! I exhausted myself trying to keep us under budget, and tortured myself about costs that I couldn’t cut. Worse, I couldn’t communicate about these anxieties without getting defensive.
How You Can Do Better: Set regular, low-pressure appointments to discuss your finances. We set up a monthly meeting, “The Wine and Bourbon Financial Summit,” to clear up any issues in our finances. The summits have worked for us: six months after our wedding, we bought our first house.
Whether you’re splitting finances with a partner or just wrangling your own savings, managing money can be tough. Fortunately, SuperMoney can help. Click here to learn more about how to stay within your budget and keep debt at bay.