joint bank account
Couples and finances
In a relationship, there’s nothing less romantic than finances. However, research shows that speaking more openly and transparently about money can actually bring you closer together. This is especially true during the cost of living crisis, where research shows money is increasingly the focus of tension and arguments.
In this week’s blog, we’ll explore:
- Couples financing in 2023
- What financial infidelity is
- How to get better at financial planning and build financial intimacy
Couples and money talk in 2023
Research shows that when it comes to money, in relationships, pressure has really piled on in recent years, with the cost of living crisis making things increasingly difficult.
As a result, more and more people are reaching out for help in these areas. According to the website Counselling Directory, there has been an increase in the number of people using its site to find a therapist and in a survey of the Directory’s therapists, a third reported more clients have been talking about relationship problems caused by rising living costs.
Likewise, an Aviva study found that while 5% of couples argue with their partner about money daily, 12% have noticed a significant increase in the number of finance-related arguments since the cost of living crisis ramped up.
Financial infidelity
While many have heard of emotional or physical infidelity, financial infidelity is lesser known but equally as destructive. This kind of infidelity happens when there is dishonesty relating to personal finance in a relationship, whether that’s having a secret credit card, hiding debts or purchases or having a secret gambling addiction.
Aviva research shows that this kind of infidelity is actually rather prevalent, too, with two in five of those in a relationship or marriage committing ‘financial infidelity’. For example, 38% of people admit to stashing money away, with the amount squirrelled away averaging at over £1,600; 32% have more than £2,000 stashed away.
There are many reasons why people hide financial decisions from their partners, but researchers suggest that often, one of the main reasons is shame.
Interestingly, couples from the younger generations are more likely to commit financial infidelity. For example, 63% of Generation Z couples are followed by 54% of Millennials.
Speaking about this, Alistair McQueen, head of savings and retirement at Aviva, said: “Being upfront, honest, and transparent about your finances with your partner can help avoid problems in the future.”
Adding: “Having a general view of how much is being spent each month, along with overall debts or savings across the household can be important when it comes to making decisions about longer term financial objectives like when you can afford to retire, or whether to downsize your home to release some capital to help your children.”
Moreover, many are able to recover from financial infidelity. The road to recovery can begin by being honest with each other, and acknowledging that financial infidelity has taken place. Listening to each other without judgement can be difficult, but experts explain this a key step to resolving the situation. Likewise, experts also say it can be an opportunity to examine your relationship and finances and, in the future, strive for transparency.
Enhancing financial planning and building financial intimacy
Research shows that while over half of the marriages end in divorce, most divorcees cite “disagreements over money” as the biggest reason for their split. As a result, experts suggest that having a clear understanding of where your respective finances are, planning things out together, and embracing transparent financing can help.
Some tips for enhancing financial planning and building financial intimacy include:
Discussing, setting and achieving shared financial goals: When you’re both agreed on a direction you want to head toward, it’s easier to budget, make a budget, track your expenses, and build savings for the future. Initiating conversations might be difficult, but there are some top tips for making things as smooth as possible:
- Avoid discussing money before you go to bed,
- Don’t drink alcohol before discussing finances; it can often make people more disinhibited, leading to less productive financial conversations,
- Make finance conversations a regular occurrence rather than a one-off. This will help you both feel more comfortable discussing money and forging financial plans.
Have an open, honest conversation about single versus joint accounts and what will work best for you both: These days, the split is about 50:50 when it comes to shared bank accounts, with many preferring to keep their finances separate from their partners’ and 49% doing so in order to remain financially independent. Of course, there are pros and cons on both sides. A joint account can help you and your partner keep things all in one place for savings and bills, but it can have wider financial implications, so make sure to think it through. For example, if you enter joint debt together, for example, a mortgage or loan, you’re both liable for the payments.
Equally, if you’ve decided you no longer want a joint bank account after opening one up, there are some tips to follow:
- Be sure to open up a new account first,
- Cancel or redirect direct debits,
- Transfer all your finances, recurring payments/bills and deposits,
- Split your money fairly.
Reach out for financial support: Research shows that financial planning support can help couples gain insight into their finances. Further, those who receive financial planning support are more likely to be unified in their financial decisions, and have more transparent communications about money.
Regularly check in about finances: Making sure to regularly review your financial situation with your partner can be a healthy way to make sure you’re both on the same page; whether that’s regarding individual concerns and anxieties, updating finance goals, or reassessing budgeting.
Decide who will pay for what and how bills will be split: A significant point of contention between couples is often how the household income and spending should be split. Experts have found that around 16% of arguments have their roots in bill contributions. So, to alleviate some of the stress and strain here in relationships, make sure to come up with an agreement that suits you both.
None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.
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