People often say that money can’t buy you happiness. But for couples, changing the way that you approach your finances could well make you more content.
Indeed, research from Indiana University found that married couples who merged their finances were happier in their relationships and didn’t fight about money as much as those who don’t.
However, some couples adopt a money mindset that works against them and makes it more difficult to achieve their financial goals. You may not even realise you are doing this if you have not considered different ways of approaching your wealth.
Thankfully, if you can recognise potential pitfalls in the way that you and your partner handle your finances, you may be happier and more secure now, and in the future.
Here are five signs that you and your partner may need to shift your money mindset.
1. Talking about “my money” and “your money”
The way that you talk about your finances can give an insight into your money mindset. For example, if you talk about “my money” and “your money”, rather than “our money”, this demonstrates that you see your finances as separate.
Typically, couples that keep their finances separate are often at a disadvantage as they do not enjoy the benefits of joint planning.
Pensions are a prime example of this. Studies from Manchester University show that in around half of couples with some form of pension wealth, one partner held 90% of the funds.
This often becomes a problem during a divorce, but even if you don’t have any plans to divorce whatsoever, managing your pensions separately prevents joint planning that could benefit both of you.
For example, if one of you has reached your Annual Allowance and can no longer benefit from tax relief on contributions to your own pension, you could pay into your partner’s pension instead.
Provided they have not reached their Annual Allowance and have sufficient earning themselves to allow them to make the additional contributions to their pension arrangements, they would still receive tax relief at their marginal rate of Income Tax on those contributions.
This may be an especially useful strategy if one partner earns significantly less than the other and is not able to contribute as much to their pension.
Additionally, paying into your partner’s pension can help to maintain regular contributions if one of you takes a career break, so you do not miss out on valuable compound returns. However, again this is only possible for net contributions in excess of £2,880, if the partner has sufficient earnings in that financial year to allow for this.
As a result, sharing your pensions and planning together could mean you have more funds to draw on during retirement. That is why it is important to shift your mindset and consider both pensions as joint funds.
This is just one example but there are many situations where joint planning could be beneficial to both of you. However, if you view your finances as separate, you may be missing out on opportunities to build your collective wealth.
2. Lying about your finances
Lying about your finances is a clear sign that you and your partner are not on the same page. Unfortunately, studies show that this is a reality for many couples.
For example, Aviva reports that 38% of people surveyed said they had a secret bank account that their partner didn’t know about. On average, people had £1,600 hidden away in these accounts.
It is also very common for people to lie about how much debt they have, often because they feel ashamed or want to avoid arguments.
This kind of dishonesty about your finances is a clear sign that you are not working together and, in some cases, you are actively working against each other.
Ultimately, this can put a lot of strain on your relationship and make it difficult to plan for the future or achieve your long-term goals.
Meanwhile, if you are honest about financial issues, you and your partner can work to solve them together, leaving you both in a stronger position moving forward.
3. Arguing about money
Money is often the main source of tension in relationships – in fact, according to the Aviva study, 26% of people argue about their finances every week.
If this sounds familiar, it could be because you and your partner have a different attitude towards your finances. You might prioritise saving while they would rather spend money on luxuries, for example.
As a result, it is important that you discuss your goals and priorities, so you are on the same page. Consider things like your risk profile, how you use credit, and the shared goals that you have for retirement.
You may also need to change the way that you talk about money if it often leads to an argument. This is especially important if you are prone to blaming one another for financial issues or being defensive.
Try reframing your conversations and focusing on how you can work together to reach your shared goals, without assigning blame for any challenges.
For example, starting a conversation about debt by saying “you’re wasting too much money each month” may make your partner feel attacked, leading them to become defensive.
Instead, you could reframe the issue by saying “we may need to rethink our monthly budget, so we are less reliant on borrowing”. The difference here is that you raise the problem as a joint issue to resolve together, rather than assigning blame and being confrontational.
You may find that this makes it easier to have more constructive discussions without arguing.
4. Never talking about money
Arguments are a relatively obvious sign that something is wrong, but it could be equally concerning if you never talk about money at all.
Unfortunately, M&S Bank found that 24% of people said they didn’t feel comfortable talking about money with their partner. Despite this, 79% said it is important that their partner has the same financial goals as them.
Yet, you cannot share the same goals and plan your finances around them if you have not discussed them in the first place!
Failing to discuss your finances can also mean that problems go unsolved for a long time, and they become more difficult to deal with in the future.
The good news is, having regular conversations about money can help you stay on track and ensure that you are both confident about your financial plan.
5. One person making all the decisions
The decisions you make about your wealth can have a lasting effect on your life. They might determine the lifestyle you can afford now and in retirement, and the goals that you can achieve along the way.
Consequently, it is important that you make those decisions as a couple. However, in some cases, one person manages all the finances and the other is largely unaware of the details.
This could make it more likely for one partner to be dishonest about financial problems. Additionally, it can mean that one person is financially dependent on the other and feels that they are not in control of their financial future.
We would always recommend that couples talk about money and make decisions together, even if one person handles the day-to-day management.
Get in touch
If you think that you need to change your money mindset, we can help you determine your joint goals as a couple.
Email hello@fcadvice.co.uk or call 0330 828 4714 for more information today.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term (minimum of 5 years) and should fit in with your overall risk profile and financial circumstances.
