Why is talking about money important in relationships?

Talking about money in relationships is crucial for transparency, trust and alignment of financial goals. It helps identify spending patterns, establish shared priorities, and prevent misunderstandings. Open communication fosters financial intimacy, strengthens partnerships and enables effective planning for the future. This approach will go a long way in promoting financial harmony and stability with close or intimate relationships.

Relationships and money: How to manage money in relationships

Money can become a source of tension in relationships, but with open communication and careful planning, it doesn't have to be.

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Everything Counts | Episode 6: Relationships and money

In this episode, Motheo Khoaripe dives deep into the financial dynamics that can make or break a relationship. Joined by financial consumer journalist, Maya Fisher-French and seasoned Investec financial advisor, Kgomotso Motloung, they explore how couples can navigate the often challenging conversations around money, financial planning, and shared goals.

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Without mutual understanding and compromise, money differences can strain trust and intimacy within relationships.

Finances may become a prickly relationship issue when you and your partner have different financial values, upbringing and communication styles.

Kgomotso Motloung, Investec financial advisor

How you see money, how you think about money and how you use money has a big impact on your partner. So I think shared financial values are very important when choosing a partner.

If you haven’t already, set a time for you and your partner to have open discussions about financial wants, goals and fears.

Here you can openly and regularly discuss financial goals, spending habits and other concerns in a non-judgmental setting. Schedule dedicated money talks, listen actively and ensure transparency.

If you wish, you can use tools like budgets and financial apps to facilitate the conversation. This type of conversation will help build a strong financial partnership on your journey to financial wellness.

When living with a romantic partner, split costs fairly based on individual incomes and expenses. Establish open communication about financial expectations and create a joint budget for shared expenses. Consider using apps or spreadsheets to track spending. Regularly review and adjust the arrangement as needed to maintain financial harmony.

According to Dene Van Wyk, financial adviser at Investec Life, a joint bank account, used specifically for joint expenses can be helpful. For example, each partner contributes the budgeted amount to the joint account and both partners get a card to use for joint expenses.

“It would be a good idea to save and invest separately, you can both identify your saving and investment goals, but execute those separately in your own name,” says Van Wyk.

Should you combine financial products?

Combining financial products, like vehicle insurance, when living together can be a practical approach, but it requires careful consideration and planning.

Van Wyk says that you should make sure you get at least three quotes and do sufficient research on the risks that are covered.

“A cheaper premium won’t always guarantee the best product. Always remember to identify your needs and make sure they are covered sufficiently. In the event of an adjustment to your current life stage (marriage, kids, etc) make sure you reassess your cover and that it’s still sufficient.”

Sheila-Ann Robey, a financial adviser at Lifeguards, an affiliate of Liberty, highlights that financial services providers have varying criteria for combining products or adding a cohabitant. For instance, when combining medical aid plans, there typically needs to be one principal member, and the cohabitant must be a financial dependent.

Further, it is important to remember that should you and your cohabitant no longer share a household, the implications of the split of your financial products may pose an administrative nightmare.

“Bearing this in mind, it may be in your best interest for each member of the household to maintain their own personal financial products,” says Robey.

What if you’re not a couple?

If you're cohabitating with someone who isn’t your partner, such as a sibling or friend, managing finances might look different.

Couples can often share a medical aid plan and combine home and vehicle insurance policies. However, friends or siblings living together may not qualify for these same benefits.

Van Wyk suggests using expense-tracking apps, such as Splitwise, to keep track of your shared expenses.

“Trust plays a key role when it comes to finances and the management thereof. Should you be cohabitating and managing your finances jointly, I would recommend that you get a cohabitation agreement in place.”