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Managing money in a relationship - what are my options?

Published 18 November 2013 by

When you're in a relationship, there are a hundred and one things to think about. There are the 'big deal' future plans like getting married and having kids and then there are the smaller day-to-day things like managing your bills and finances.

Every couple is different, so it's only natural that what suits one partnership financially won't suit everybody.

In this blog we take a look at some common options for covering the bills and outgoings for people in relationships.

In it together

Many people - particularly those in long-term relationships - choose to share all they have and continuously build on it together. Lest we forget, "All that I have I share with you" is written into the marriage vows after all.

It's common for couples to adopt this approach when it comes to their finances too – by having a joint bank account. Normally this works by having all the joint income paid into one account, which is used to pay the bills. Both people then have a card and joint access to the money.

There's no denying this approach is convenient. If you share a house, maybe even share children, why wouldn’t you share a bank account? But if you're in a new relationship or just want to keep your financial independence, you might not want to commit to sharing everything.

So what are your options then?

Split it down the line

If you want to keep some financial independence or if you're in a new relationship that you're unsure is for keeps or not, you might want to keep your finances separate. That way, if it doesn’t end up being rosy and wedding vows aren’t on the cards, you can walk away with your finances unaffected.

Many couples who do this have a separate bank account for bills that they both put an equal share of money into. Other outgoings, like leisure activities, are then just split down the middle too.

In principle this is a good idea for managing money but depending on how far you take it, it could get tedious. For example, things like splitting the restaurant bill to the penny or scrabbling the change together for your half of the parking meter may be a bit OTT - who said romance was dead?

This option generally offers a middle ground for people between joint and separate finances - but some choose to handle their money more independently still.

What's mine is mine

For those who choose this approach, it means keeping their money entirely separate. This works particularly well for people who want to keep an individual financial identity whilst in a relationship. Normally couples who spend like this don’t have a joint bank account and pay the bills individually as and when they come up.

This allows each party to keep their finances private and can work for people who don’t want their partner knowing how much they earn or what they're spending their money on.

Being the breadwinner

Earnings can be a major factor when choosing how to run your finances. In most relationships there will be one person who earns more than the other. While it can be a bone of contention for some couples, it can mean a successful financial situation for others.

In these relationships it's normally agreed that the person who earns the most money or is the sole income provider covers the outgoings, with the other person having joint access to the money but contributing in other ways - as a stay-at-home parent, for example.

The way we handle our finances varies from relationship to relationship, depending on circumstances like this, but that's just the day-to-day account situation. There are also other factors to consider, for example debt and death.

Who's liable for what?

When things go sour or a relationship ends, it doesn’t always mean the end of financial dealings - especially where debt is concerned.

What many people don’t realise is that if you get into debt with a partner, you could both be obliged to repay it.

So, for example, if you take out a loan with your partner where you are “jointly and severally liable” and then you split up, you would be liable for the full outstanding balance if they don't repay it.

With this in mind, you might like to consider whether you'd rather take out credit in your sole name or if you want your partner to do the same, to avoid getting into joint debt.

It's also important to consider what you want to happen financially if the worst should happen.

Where there's a will…

It's a dismal topic that no one likes to think about in great detail but it's really important to consider death when making decisions about your finances.

It might be surprising to learn but if you're in a serious relationship but are not married or in a civil partnership, your partner is not necessarily entitled to any of your assets, unless there is a will.

While what happens financially may be against your wishes, your partner has no control over this. A will allows you to outline exactly who will get what - and without one, your partner may be left with nothing. So if you want to have a say on who gets what if the worst does happen, you'd need to make a will.

From early days in a relationship to "until death do us part", there are many options for running your finances and we hope this blog has explained those in a little more detail.

With so many options available for managing your finances, how do you choose to do yours? Tell us through Facebook, Google+ or Twitter.