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Since my husband and I moved in together over 20 years ago, we’ve shared our finances. I don’t remember too much discussion about this; we were buying a flat together and pooling all our resources was the only way. We opened a joint bank account, put everything we earned in there and that’s what the mortgage and all our bills came out of. I think the original idea was that we’d share anything left over to individual accounts but we had so little and any extra went on joint purchases so this never happened.
This has always worked for us and we’ve rarely argued about money but I recently learned that less and less millennials have joint accounts and that doesn’t surprise me either. We started this at the very same time as getting real financial independence; it’s all we’ve known and has always felt fair because even at times when each of us has earned differently we’ve been working towards the same goal.
When it comes to sharing finances, one way is not better than another, each has it’s pros and cons and can also depend on your marital status. For example, we were sensible to have our mortgage come out of a joint account before marriage because this can be a way to prove equal ownership if you separate. Whilst marriage tends to offer each partner more financial security, if you divorce, financial claims will include all your individual finances too. Each couple will approach this differently and whilst I’ve always thought the fairest way was probably to have individual accounts and pay equally into a central account for all joint bills and purchases; this doesn’t work if one half of the partnership is a homemaker, works part-time and probably in lots of other scenarios I haven’t considered.
You’ll want to discuss finances early on, experts suggest doing it whilst the relationship is new and exciting and definitely before any big life commitment like property purchase or starting a family. You’ll need to discuss a range of scenarios and a financial advisor could be helpful being knowledgable on situations you may not consider. I’m sure they’ll tell you that after deciding how your finances will be split and which of you will manage them you need to think about savings, investments, taking out a pension, life insurance and similar. They will also be able to help you understand all the benefits and possible risks involved in these financial products, for example, the value of your pension can go up as well as down so you might get back less than you’ve paid in.
Funnily enough, I manage most of our finances as part of the admin of the home even though Anthony is probably more practical and financially minded. If anything’s important then I run it by him but mainly he trusts me to make all the day to day decisions. Whilst finance might not be the most fun conversation to have, communication is key to a happy relationship and this is an area where it couldn’t be more true.