Babe, we need to talk.

…about money.

It’s not the most sexy topic, especially when you’re being swept up in romance Dirty Dancing style.

But at the end of that honeymoon phase comes a time in any successful intimate relationship, either through marriage or cohabitation where ya gotta talk numbers.

Especially when three quarters of Australian couples have disagreements over money.

And there are some big questions to deal with. Should you split costs 50/50? Should you combine your incomes? Should you save and invest collectively?

Yikes…

While there is no right approach or right answer, there are a couple of tried and tested strategies that could work for you and your partner.

1. Using a shared account

Opening a joint account can be an easy way for couples to pool their income together in one place and spend on household expenses from that pool.

It’s also useful if you’re working towards joint financial goals to see how you’re tracking, and makes it easier to manage your money overall. #couplegoalz

Some couples might choose to have most of their money come together into a joint account, and then have separate personal accounts for their individual purchases.

This is the ‘yours, mine, our’ system where your day to day expenses are paid out of a shared account and you keep separate accounts for your own spending.

You might choose to have your paycheck come into your personal account and contribute your share of household expenses to the shared account or vice versa.

That way you can spend guilt free on another houseplant even if your partner thinks you have enough (there’s no such thing as enough houseplants).

And you can buy each other surprise gifts without the bank statement giving it away.

2. Splitting your spending half-and-half

This is probably the easiest, set and forget way to split money with a partner, where each partner looks after 50% of the household expenses.

But this method might not sound fair to all couples, especially when one partner might earn a lot less than the other but still has the same expenses.

But if you’re a couple who earn quite similar and this method aligns with you and your partner’s values then you do you boo.

3. Splitting your bills by income percentage

There’s a solid chance you and your partner earn different salaries. 

You might work in totally different industries, be at different points in your career, or have a different relationship with work.

The gender wage gap is also something that impacts many couples.

So it becomes important to think about achieving financial equity rather than equality, and think about developing a sense of security and teamwork for you both.

And one way to do that is to split your bills by your percentage income. 

So if one partner brings home 40% of the income, and another partner brings home 60%, then your bills could be divided 40:60.

Quick example:

Schmidt earns $72,000 a year and his partner Cece makes $108,000 a year, which is a total household income of $180,000.

Schmidt’s portion of household income is 40% and Cece’s portion of household income is 60%.

That’s a 60/40 split!

Assuming their household expenses are $3,500, Schmidt would contribute 0.4*$3,000 = $1,400 to the household expenses and Cece would contribute 0.6*$3,500 = $2,100 to household expenses.

Opening a shared account can be a big step that’s not suited to every couple, in which case it might work to transfer each other for bills based on your share of the expenses. 

There’s no one right way to manage your finances as a couple, every couple has their own way of doing things, and is at different points in their journey.

It’s important though to have an open conversation about your finances and be willing to be honest and vulnerable with each other.

Lots of love xoxo