I’m a finance expert – how couples can manage their money to avoid arguments

WORKING out how to manage your finances with your other half, and not fall out, can be tricky.

Almost half of couples aged 35-55 have a joint account, but they challenge each other on average three times a month about spending. 

So some prefer to keep their finances separate, found a survey for Income and Expenditure Hub, an online budgeting tool.

Myron Jobson, analyst at online personal finance service Interactive Investor, says: “It’s vital to find a way to manage money that you’re both happy with, to prevent bust-ups and plan for the future.

You need to have these difficult conversations to stop problems snowballing and putting a strain on relationships.”

Harriet Meyer looks at different solutions, so you can find one for you.

JOINT ACCOUNT

YOU both pay your salary into your bank accounts but pay the same amount into a third account each month.

Bills and general expenses such as groceries are likely paid from this.

You’ll both have access to your joint account, to keep an eye on how much you’re spending. 

You may decide to set up another account to save toward goals such as holidays. 

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says: “You just need to manage how much money is paid into the account carefully, so it doesn’t run short.”

Your contributions may change over time.

You may also choose to set spending limits, so anything that costs above a particular sum needs to be agreed.

Tread carefully if your partner has a history of debt problems, as joint accounts financially link of your credit scores.

A problem here could make it more difficult for you to get credit in the future. 

PERCENTAGE METHOD

YOU’LL have a joint account but pay different amounts into it. 

This approach is often used if one person earns much more than the other.

Coles says: “If, for example, you have regular bills of £1,500 a month, and one of you has take-home pay of £30,000 and the other £20,000, you might agree the higher earner pays in three fifths, or £900 a month, and the lower earner two fifths, or £600. 

“This has the advantage of making the bills equally affordable for both of you.”

Some people will think it’s unfair to pay more just because they earn more, and will want to split bills 50:50.

But talk it over together and you should be able to find a solution that you are both comfortable with. 

ALL-IN APPROACH

BOTH salaries are paid into a joint account.

All bills and expenses are paid from this, including treats and holidays. 

This approach avoids any financial secrets, and is more likely to be used once you’ve been together for a long time.

But it doesn’t suit everyone, and can be a recipe for disaster if you end up rowing over every penny spent. 

Peter Saddington, a Relate counsellor, says: “There are of course potential risks that one person might spend more money than the other.

“This is really noticeable in a relationship where there are different approaches to money — one likes to save and one likes to spend. 

“The person who saves can become resentful.”

PERSONAL ALLOWANCE

AS the only earner, you put money into your partner’s bank account to cover their personal expenses.

This may work if one person is at home looking after kids, or off work for some time.

You need to decide together on a reasonable amount, and what you expect it to cover. 

But Coles warns that, in some cases of financial abuse, one person makes all the financial decisions and may not provide the other with enough even for essentials. Or they may demand something in return for the money.

She says: “Where one member of the couple has the power or control, this can be a dangerous way to organise your finances.”

This could also mean all bills end up being in one person’s name, making it difficult for the other person to keep track of the finances, or build up a credit score.

Also, if you split up, one person could be left with a battle trying to get on top of the finances.

SHARING THE LOAD

YOU have separate accounts, and take responsibility for different bills. 

For example, you pay the household bills, but your partner pays for holidays and kids’ stuff. You could split just one bill, such as the mortgage.

This could work if you prefer to keep your finances separate and don’t want a joint account.

Saddington says: “It can work well but can be time-consuming and constantly needs checking and refining. 

“Bills can suddenly increase with little warning and one person can then end up resenting that they are spending more than the other.”

There’s also the risk that one person misses a payment.

But you could keep a tally of things you consider to be joint expenses, and settle up between you at the end of each month. 

‘He pays more to joint account, as he earns more’

MARRIED Leanne and Matt Woodward have a joint account and each pays in a different proportion to their income.

She is a senior sales executive, on a salary of £30,000 a year, and he a design project manager earning £42,000. 

She pays £1,200 a month into the joint account, he pays £1,350.

Leanne says: “It wasn’t an exact calculation, but we’re happy with it. 

“He pays more because he earns more, and we’re left with around the same amount to spend each month from our salaries.”

Leanne, 32, and Matt 42, from Lincoln, have had a joint account for about seven years, and have set up direct debits from it to pay all their utility bills and a £755-a-month mortgage.

She says: “It’s caused some tension when he accidentally puts something through the joint account that he shouldn’t, but he pays the money back.” 

The couple found it tough, though, managing their finances when Leanne was on maternity leave for daughter Neve, now nine months.

She says: “I don’t like to rely on him to pay for things – it caused arguments because we’d run out of money.”