Planning as a couple: 3 steps to help you build a shared future when one of you is the breadwinner
Planning finances as a couple can be complicated, especially when one of you is the breadwinner. Here are three simple steps to help you build your shared financial future happily and healthily.
If you have a natural predisposition to avoid “talking money”, you’re not alone.
Barclays research on the UK working population found that:
- 33% say talking about their finances makes them feel uncomfortable.
- 29% avoid talking about money even if they know it would help their situation.
- 50% say it feels rude to discuss money.
Opening up about your personal finances could mean you gain access to valuable opportunities to grow, conserve, and protect your wealth.
If you have a spouse or partner, these benefits aren’t just financial but emotional too, bringing you closer as you work to build a shared future.
Navigating conversations about money isn’t always easy, especially when one of you earns more, but transparency and honesty are key. Keep reading to learn how financial advice could help you and your partner build a shared plan for the future in just three simple steps.
Transparent and open communication about money can help you build a shared financial future
As your relationship develops, it becomes increasingly likely that you’ll have shared assets and debts, like a mortgage for your family home.
It also means that a variety of sensitive topics may be discussed the more your lives and finances become intertwined, such as:
- Salaries
- Savings
- Debts
- Credit scores
It’s important that you don’t shy away from these discussions. While the idea of opening up about your personal finances might sound counterintuitive, it can improve your planning accuracy, strengthen your relationship, and give you a better chance of achieving your financial goals.
Honesty can help you build trust and achieve your goals more effectively
According to Citizens Advice, those who speak about money:
- Make better and less risky financial decisions
- Have stronger personal relationships
- Find that their children form good lifetime money habits
- Feel less stressed or anxious and more in control.
From an emotional standpoint, being transparent about your finances can strengthen the bond you have with your partner. This is especially the case if one of you earns more, as openness allows you to become equal decision-makers.
Honest planning can also help you align your practical objectives for the future, like your retirement age and lifestyle.
3 easy steps to help you and your partner create a shared financial future
Step 1: Separate your personal and shared goals
While you are working towards a shared financial future, it’s equally important that you pursue your own aspirations, passions, or purpose.
For example, it’s important that you see eye to eye on certain goals, such as:
- How much cash you hold in your emergency fund
- Paying off shared debt, like a mortgage
- Creating a retirement lifestyle
- Deciding on an estate plan for your children.
However, you may also want to achieve objectives important only to you. These can be anything from acquiring a later-life degree to buying your dream car.
Having personal and shared wealth goals ensures that you still have the freedom to use your wealth how you want to, while also supporting you and your partner’s future together.
Step 2: Establish a framework for how you cover shared costs
When one of you earns more, organising how much you each contribute to essential costs like food, utilities, and rent can be a source of tension if left undiscussed.
How you organise your spending is up to you. What’s important is that you both agree on a framework by which you fairly pay for costs you are both responsible for.
There are several options to choose from:
- 50/50 split – All of your essential costs, including savings, are split down the middle, meaning you and your partner both contribute an equal amount.
- Proportional – You both contribute based on what you can afford. For example, if you earn £100,000 and your partner earns £50,000, then you will fund your lifestyle according to a ratio of 2:1.
- Combined – You could pool all your wealth and share the same bank account to pay for all your expenses, as well as decide on spending money.
Each option has its pros and cons. Make sure you think through each before you decide on the best solution for your situation.
Step 3: Work with a financial planner
Navigating these conversations isn’t always easy. You might be anxious about discussing your personal finances with your partner or asking them to do the same.
In cases like these, your financial planner can act as a third-party mediator, facilitating discussions about your shared wealth and future to keep the process exciting and productive.
We can also reduce potential tension by helping you form realistic expectations for the future that accommodate your shared and individual goals.
If you’d like to learn more about what our award-winning team can do for you and your partner, please get in touch.
Email us at hale@kelland.co.uk, or call 0161 929 8838 today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.