How Should Couples Manage Money?

Should couples share their money? When can you ask someone what their salary is? How do you avoid money disagreements? Canstar asked Australians what they think – and the answers may surprise you.

While most people agree that money doesn’t buy happiness, being on the same page – financially speaking – can reduce stress and conflict. Research by Relationships Australia shows that two of the main reasons why relationships suffer are financial stress and communication difficulties, which are certainly inter-related issues.

Yet surprisingly, 55% of adults living with a long-term partner do not set aside time on a regular basis to discuss their financial issues. So we here at Canstar decided it was time to clear the air and ask once and for all, how do couples and singles think money should be managed in a relationship?

Should couples share their money?

This year Canstar surveyed people about their attitudes towards love and money. Our results show that the majority of couples (58%) believe that everything should be equal when it comes to money in a relationship. However, another 2 in 5 couples (39%) believe that couples should keep money separate and share when necessary.

Understandably, keeping money separate and sharing only when necessary was the top response of most singles (65%), followed closely by keeping all money separate (18%).

Age also makes a huge difference when it comes to attitudes about sharing money. Gen Z survey respondents (currently aged under 21 years old) overwhelmingly said they prefer money to be “Yours, mine, and ours – sharing when necessary” (79%).

Gen Y (Millenials currently aged 22-36 years old) had a tougher time choosing between keeping money separate and sharing when necessary (53%) and keeping money equal all the time (41%).

Older generations including Gen X (currently aged 37-51 years old), the Baby Boomers (52-70 years), and the Silent Generation (71 years and up) leaned more heavily towards keeping all money equally shared.

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Keeping all money shared doesn’t necessarily mean joint bank accounts. Around 1 in 2 couples have a joint bank account (49%) and/or joint credit card (48%), according to survey results taken in 2016. But it’s important to discuss between yourselves whether they would be right for your particular shared financial situation as a couple.

For example, joint credit cards are not a great idea for new couples, as they create a shared debt. You may not have the same goals for the shared credit limit, and if you break up while there’s still a balance owing on the card, it can cause a major headache on top of the heartache.

Ideally, keeping all money shared should mean regularly communicating about how money is coming in and going out. Are the bills all being paid on time? Are you both managing to put aside some savings towards shared goals or your own individual savings goals?

For those couples where each partner has different savings goals, keeping your savings in separate accounts can be a sensible move. Of course, it’s important how you do it. Keeping financial secrets like a secret money stash hidden from your partner can fundamentally damage your relationship, whereas maintaining open lines of communication is a vital lifeline for any relationship.

When should you share information about your finances?

The majority of people Canstar surveyed (43%) believe you should share information about your finances with your partner when you move in together. Read this article for our best tips for making money matters go smoothly during the moving-in process.

For current couples and those who had been divorced or widowed, 45% said moving in was a good time for “the money talk”, while 12% said the 1-year anniversary of dating was a good time. An equal number said you should only share about your finances when you get engaged (8%) or when you get married (9%).

Meanwhile, 39% of singles believe you should share your finances with a partner after 3 months, when things are Facebook official. 10% of singles said a 1-year anniversary of dating would be the best time to open up about your financial position.

When can you ask what someone’s salary is?

Apparently, it is still taboo to ask a date about their salary, with 98% of singles saying they wouldn’t dare ask a first date about their salary. This question got a similar response across all generations.

Australia being such a multicultural nation, these findings are somewhat surprising. It shows that across the vastly different cultural backgrounds coexisting in Australia, people are generally consistent in not wanting to ask straight away what someone earns. Canstar’s findings in this matter are consistent with similar studies in the UK, which found that 98% of singles and couples would not ask about the other person’s salary on a first date.

Of course, there comes a point when not knowing what your partner earns is just plain awkward. For example, if you don’t have a good idea of what they earn when you are moving in together, how do you know whether it’s fair in terms of who is paying what? How do you split the energy bill for the quarter? If you have shared savings goals such as a wedding, a house, a baby, or even repaying debt, how do you know how to get there together?

Sadly, some couples never get past the awkward stage to find out where their partners are at financially. A 2015 study by Fidelity in the USA found that 40% of married people surveyed had no idea how much their spouses were bringing home.

Should you ask if someone owes debts?

In a similar vein to knowing how much your partner earns each year, it is vitally important for long-term couples to know whether the other person owes any debts, and exactly how much is owed. In terms of when should you ask about this, frankly, “the sooner the better” seems to be a sensible approach.

Canstar asked our survey respondents how much credit card debt would be a deal breaker for a date. 92% of singles said that $1,000 or more in credit card debt would be a deal breaker for going out with someone. But it’s one thing to owe $1,000 and quite another thing to owe $10,000 – so partners need to ask direct questions about the total amount in red.

Unfortunately, as we mentioned above, only 2% of the people we surveyed were willing to share their finances with a potential partner on a first date… So the question is, how will the rest ever know what they are getting themselves into?

It’s always best to ask someone about their financial situation before things get serious. Then you can resolve together whether to use your combined money to repay their debt, or whether the person with the debt will be solely responsible for tackling their financial problems. It’s a big decision and not one that should be taken lightly, given the legal and relational implications.

Should you trust your partner with money?

In an ideal world, you should be able to trust your partner with money. Whether or not you should trust your partner with money depends absolutely on your financial situation as a couple.

The good news is that when we asked couples whether or not they trust their partner when it comes to money, overwhelmingly, 88% said they do trust their partner.

Should you keep tabs on your partner’s cash?

Approximately 1 in 3 partners or spouses (34%) said they monitor their significant other’s financial habits. This is not necessarily a bad thing – as we’ve said before, frequent communication about your shared financial position is vital to avoiding money arguments. But how you go about it is important.

The most common methods for monitoring a partner’s finances were:

1. “I regularly ask my partner what they have spent money on.” (57%)
2. “I go through their or our credit card statements to look for suspicious purchases.” (21%)
3. “I regularly check my partner’s bank account balances online without them knowing.” (18%)

Obviously, regularly asking your partner about their spending and saving as part of your usual money conversations is the method least likely to offend your partner. On the other end of the scale, checking your partner’s bank accounts or credit card statements without their knowledge is a move that is highly unlikely to prove your trustworthiness and affection to your partner.

Other methods of keeping tabs on a partner’s spending or saving included:

• “I speak to our Accountant/Financial Planner behind my partner’s back.”
• “I go through my partner’s wallet to see how much cash they have.”
• “I give my partner an allowance or budget.”
• “I ask their friends or family what my partner has spent money on.”
• “I track my partner’s location so I can reconcile purchases.”

Monitoring behaviour was higher for people who had admitted to hiding a financial secret from their partner; 38% of those who had hidden a secret from their partner said they monitor their partner’s spending. But interestingly, of those who said they don’t trust their partner or spouse when it comes to money, only 50% of them actually monitor their partner’s financial habits.

How to manage money with your partner

If money issues are getting in the way of your “happily ever after”, consider the following tips:

• Talk regularly. Whether it?s saving for your retirement or day-to-day budgeting, money isn?t the most exciting of topics. It?s important, though, to set aside some regular time each month to talk together about money issues.

• Respect each other?s viewpoint. Your attitude towards money is shaped from a range of things including your family upbringing, friends, co-workers, and the media. You and your partner may have had quite different influences and have quite different attitudes because of that. You need to understand where each other is coming from and respect each other?s viewpoint.

• Agree to disagree. No two people will ever agree with each other 100% of the time and no individual will ever be correct 100% of the time. If both of you are prepared to compromise sometimes with regards to spending and savings goals, it can help to smooth financial conflict.

• Have a written budget. Whether you share finances or not, having a written budget in place to track your earnings and spending is a fantastic way of putting you in control of your money! Try our online Budget Calculator or Savings Goal Calculator.

• Ask for help if you need it. If money dilemmas are overwhelming your relationship, take advantage of the free financial counselling service that is available in every state. Contact Financial Counselling Australia for more information. Find out more about what financial counsellors do here.

Managing money as a couple doesn’t have to be a cause of headache or heartache. Read this article about how finances can strengthen your relationship for more ideas on how to get a head-start on your shared future together.

Jealous of the size of your partner’s savings account? Compare your options on the market for savings accounts using the Canstar website, and see how you could earn more interest with fewer fees with a 5-star rated savings account:

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Have your say for Valentine’s Day

How do you and your partner work out money between you? If you’re single, what are you looking for when it comes to how a potential mate deals with money?

Join the conversation on X (@CANSTAR) or on our Facebook page using the hashtag #ValueYourValentine.