Money and marriage: Sharing the load or doubling the trouble?

For many people, the discussion of money in a relationship starts on the first date: who pays? In a study that looked at changing gender norms, 64% of men believed women should contribute to dates, but even more men felt guilty for taking a woman’s money.

In one survey, someone said that “the bill sat between us like an exploding landmine”, waiting for someone to take the first step.

These can feel like such loaded moments because they easily set a holding pattern that could cause lingering tension in the relationship. They’re also complicated by cultural expectations, sexual orientation, age differences and imbalances in earning power.

How do you navigate these difficult conversations in ways that don’t feel adversarial, and what happens when you get married and have a legal contract to consider?

Have the honest conversations often – and early on

Money conversations must start with open (and even vulnerable) communication because we all relate to money differently. Spenders may want to enjoy the financial rewards they work hard for today, even if it means taking on extra debt. Savers will want to invest more and pay off their debts faster to feel safer and in control.

Behavioural economists call this intertemporal choice – deciding whether to consume now or postpone consumption for a better outcome later on.

How we make these choices can be profoundly shaped by whether our upbringing was ruled by scarcity or abundance. The key is to show patience with each other. You can both get what you need with a bit of compromise as long as you have a shared view of your long-term financial goals.

If you need a guideline, learn about the 50/30/20 rule in episode two of Investing in Life: Save vs. Spend: When to live it up, and when not to.
 

How should married couples split finances?

There isn’t an exact one-size-fits-all rule on how to manage finances in a marriage. Some people often open up joint cheque accounts for shared expenses like groceries, utilities, rental or bond repayments, and a joint savings accounts for emergency funds and shared goals like holidays.

While these are useful ways to segment shared expenses, bear in mind these accounts will be frozen if one spouse dies while the estate is wound up, which could present a cash flow challenge to the surviving spouse.

The solution may be for each person to ringfence emergency savings in their own name, just in case.

Joint accounts also pose a challenge when one partner earns significantly more than the other, which often happens as careers evolve over time. A 50/50 split is reasonable when your salaries are broadly equitable, but can pressure the relationship when they’re not.

The answer is usually a proportional split of income to expenses. However, do this mindfully to avoid an unequal power dynamic where one partner feels their decisions carry more weight because they earn more.
 

When you get married

As much as marriage is a beautiful symbol of lifelong devotion, it is also a legal contract that asks for agreement about how you treat the assets you bring into the marriage and those you accrue together. This needs good communication well before the wedding: antenuptial contracts can cause tension because they ask you to consider what happens if the marriage ends.

This must be a “head over heart” moment for both parties because under specific arrangements, you don’t only accumulate assets together but financial risks, too. And if one partner gives up their career to look after children, you need to account for that in your marriage contract.
 

Planning for the future – whatever may come

When you’re married, you have a legal duty to support each other, which continues after death. If one spouse dies prematurely, long-term insurance like life cover will fill the gap during a time of intense grief, ensuring that financial liquidity is taken care of while estates are wound up.

Without this cover, assets often have to be sold quickly to raise emergency cash, all of which may destroy wealth unnecessarily.

The value of your life insurance needs to account for how many people depend on you for financial support. Couples with children may need more life insurance to cover future schooling needs and living expenses, but also consider that your parents and/or grandparents may become dependent on you as they age. Financial advice for married couples can help you plan for these future responsibilities.

If you’re paying off a house together, particularly in a joint bond where your affordability is based on both of your earnings, consider mortgage protection insurance, which settles the outstanding balance on your home loan if one spouse dies or suffers a permanent incapacity event. Without it, you might face monthly repayments you cannot afford alone.

It is also important that each spouse takes the time to understand the household and marriage finances in detail so they aren’t left in the dark if the worst happens. Having everything written down (like access codes, passwords, file locations, bank account) in a secure vault can provide clarity during a difficult time.
 

Doing it together

As a couple, you are better hedged against uncertainty because you’re less likely to simultaneously face economic events like a job loss. You also have greater borrowing power due to dual income but lower expenses since household spending for a couple is not twice that of an individual.

In any relationship, there are three “people” to care about: me, you and us. When you realise that you aren’t just two individuals coming together for convenience, but that the relationship itself deserves an equal share of attention, you plan your financial world differently.

Managing finances as a couple requires mutual effort, compromise and planning to ensure financial security and harmony.

1. Do I have the fundamentals in place?
   • An up-to-date will that I have discussed with my partner
   • A retirement plan that reflects my retirement goals
   • A savings and investment strategy both for me individually and together as a couple
2. If I plan to marry, do I understand the legal consequences of marrying in- or out-of-community of property, and with or without the accrual system?
3. Do I need to reassess the value of my life insurance, given my responsibilities as a partner or when I become a parent?