Open-mindedness and compromise are key in any relationship—especially when discussing money.

 

When you see the trash bag is close to overflowing, thereʼs always that part of you that assumes your partner will notice the near-spillage and replace it. Am I right?

 

The only trouble is, your partner may assume the same of you. Itʼs this kind of miscommunication that can turn a sweet relationship sour—and your household finances into a stinking mess.

 

When I talk to couples about how they share their financial burden, Iʼm struck by how many of them arenʼt on the same page. For instance, itʼs common for both halves of a couple to simply assume their partner will be the one to pick up an extra job in the event of a financial emergency. The lower-earning spouse might naturally assume the other will pick up the tab in the event of a financial catastrophe—an expensive medical emergency, say. But since that higher earner covers the mortgage, for example, they might assume the same of their partner. Thatʼs why a conversation about hypothetical scenarios is a priority for all couples—right up there with who takes out the trash.

 

True equality is about sharing, not splitting
The trick is to recognize your actual strengths rather than fall into the traditional gender roles that may have been modeled by your parents or the sitcom characters you grew up with. If it works for you to pool everything into a joint account, where thereʼs a maximum transparency and trust, do it.

 

Iʼm constantly surprised to hear how the majority of couples donʼt have a joint account in addition to their personal bank accounts. There are clear benefits to sharing a joint emergency fund for those unexpected expenses where it isnʼt immediately clear who should pick up the tab (e.g. the air conditioner breaks down). Money is one of the major relationship wreckers, and having a shared pool of money may minimize tension when those costly emergencies inevitably arise.

 

What to bring to the table
Approach the conversation with an open mind—willing to make compromises for your partnerʼs wants, even when they donʼt align with yours. More importantly, make sure you choose the right time to have this conversation; neither of you will be very sympathetic to the otherʼs needs while rushing to gym class or after a particularly stressful day. Some points to cover:

  • Spell out your personal goals. So your better half wants to spend $3,000 on a new TV, but you have other ideas on what to do with that money? Find common ground and arrive at a solution that satisfies both of you.
  • Define your professional goals. How much do you hope to make in the year ahead; will either one of you get a bonus, and how will that money be used? How are you going to pay for that new state-of-the-art TV if you havenʼt even talked to your manager about a bonus or pay raise?
  • Clarify your roles. Does it still make sense to split bills 50/50 when one of you earns more than double what the other makes? If you donʼt know what your spouse earns, it might be a good idea to have that conversation. Youʼre a team, after all.
  • Regard retirement saving as a joint effort. Although you and your partner might have your own separate IRAs,
    403(b)s and various other retirement saving vehicles, youʼre both heading to the same destination, and need to get there together.
  • Be tax smart with your pooled resources. If one of you earns, say $30,000 per year compared to the otherʼs $130,000, both of you can still benefit from the $18,000 annual limit for 403(b) contributions and $5,500 limit for IRAs. And if the lower earner has a better healthcare plan that covers both of you, the premiums may not leave a lot left over in his or her paycheck, but that doesnʼt matter when the overall household income is $160,000. Look at it as a joint paycheck, and be tax efficient with it.
  • Have a five-year check-in. Even if your plans were in perfect harmony five years ago, chances are theyʼve diverged since then. When a coupleʼs shared circumstances change, it doesnʼt necessarily follow that their minds will change in tandem. An ongoing dialogue is your best defense against lingering misunderstandings and simmering resentment.

 

 

The important thing is to come to an agreement on who is responsible for what—so that everyone feels they are doing their fair share. Iʼve found that the continual realignment of goals, negotiating and compromising brings couples closer together.

 

 

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