In the early stages of romance, when things are getting hot and heavy, raising the subject of money can be a real buzzkill.
When is the right time to have the money conversation? OK, maybe not on the first Bumble date, but you also don’t want to be walking down the aisle when you find out your love is up to their eyeballs in debt. We don’t want you to catch any STDs (sexually transmitted debts).
So, if you share a bed should you share a bank account? Who pays for what? Let’s break it down so you can turn to your honey and confidently say, “It’s time to talk about the money!”
Your money is something you can’t outsource to your partner. You need to be the CFO (chief financial officer) in your life.
Research from UBS showed that 98 per cent of widows and divorcees would advise other women to take a more active role with their money. Your partner is not ‘better at money’ and once you hand your financial power over it can be very difficult to get it back.
Having difficult conversations now, while things are good, will put you in good stead if things get rocky further down the road.
So let’s take it back to the start! The big question is who pays the bill?
Like the bill, this conversation can be split a few ways. If they asked you on the date, does that mean they pay? If you asked them, does that mean you have to pay? What if they are super boring or just talked about themselves, should they pay?
If they ask you to the most expensive bar in town, is it on them? So many questions … it was just one meal!
Emily Brooks, in her book The First Move, makes an excellent point that if you don’t make an attempt to pay as they are reaching for their wallet, what your silence is saying is, “I can be bought.” You’re laying down unequal ground on which to build a relationship and the other person will notice.
My personal opinion is to split the first dinner or, if they insist on paying, be very clear that you will get the next one or the drinks.
When I go on dates and I’m not interested in the other person, I will insist on paying half the bill or at least buying them a drink so I don’t feel like I owe them anything. If I like them and they insist on paying, I let them know I’ll get the next one (wink face).
Another big question we get asked all the time at Ladies Finance Club is how to split finances with your partner. Here are two approaches that we find are most popular!
Option 1 – When you earn similar salaries
Keep your individual bank accounts but also open a joint house account together. You’ll use the joint account to pay for your shared household bills 50/50.
You might also want to have another joint account for holidays or special occasions.
If you’re going to do this you’ll just need to set some ground rules and discuss how much can be spent without the other knowing and what is a house expense (yes to toilet paper and WI-FI, no to buying expensive shampoo and conditioner).
Other questions that will pop up will be things like do we want to pay for a cleaner? Who is in charge of paying which bills?
Option 2 – When one person earns more than the other
Add your individual incomes together to get your total household income. Then calculate the percentage of that total each partner makes.
Let’s look at an example of Molly and Brad (cough, Pitt). OK, so Brad works in movies and earns more than Molly who runs her own dog grooming business.
If Molly earns $65,000 a year while Brad is on $100,000 – that’s a total income of $165,000.
Molly’s total household income is $65,000 ÷ $165,000 = 39 per cent
Brad’s total household income is $100,000 ÷ 165,000 = 61 per cent
Now add up all the expenses you’ve agreed to split.
Then use the percentages to see how much you’re each responsible for.
If monthly expenses (rent, bills, cleaner, etc.) came to $3000:
Molly’s portion is $3000 x 39 per cent = $1170
Brad’s portion is $3000 x 61 per cent = $1830
Every month, both partners transfer their share into the joint account.
Some partners will be happy with this, others might find it unfair. This is where it’s really important to have an open conversation and ensure everyone is happy with the arrangement.
It’s important you always have your own ‘fun money’ and never need to feel guilty or ask for permission to spend it!
Now if you don’t know how much each other earns and you don’t feel comfortable asking, this might be a red flag or you might need help from a counsellor.
My girlfriend and her partner do Wealthy Wednesdays where once a month they have a date night in and chat about where they are at with their finances and goals. I should point out that they are one of the happiest couples I know!
Until you are married or considered in a de facto relationship (rule of thumb is around two years) it’s important to keep major purchases separate and documented, because you don’t have the same legal protections as married couples in case of a split.
Keep track of who paid what towards every major purchase (like furniture and appliances) in a simple Excel spreadsheet, and keep your receipts.
Financial stress is relationships
Relationships Australia says financial stress is one of the leading contributors of separation in Australia. If you have a partner, money will play a big role in your life together and you want to make sure you’re on the same page.
Who you marry is one of the biggest financial decisions you make – not if they are wealthy or not, but if they come with debts and if they support your career (especially if you’re taking time off to have kids).
The conversation can start and continue from the first date. If you’re really struggling to broach the topic, there are financial coaches who work with couples to get aligned on goals and spending rules. Want to nail your #couplegoals then honey start talking about the money!
This is an edited extract from ‘Girls Just Wanna Have Funds’ out on January 31 by Molly Benjamin. The book has a list of questions you should ask your honey about the money!
