How to navigate financially when living as a couple - Sarah Coles

Women are slightly more likely to say they’re better with cash, which could be one reason why our previous research showed that women are more likely to take the helm when it comes to looking after household finances like bills. It’s an interesting finding, given that historically men were considered the head of the household financially, and until the 1970s women could struggle to open a bank account in their own name, or take out a mortgage without a male guarantor.

However, for anyone who remembers growing up in a household where their mum ran a tight ship on a limited budget, it’s not a surprise.

This isn’t because of any innate biological difference between the sexes, and may well owe much to the fact that typically women are on a lower budget than men, because, on average, they earn less. It reflects findings that basic rate taxpayers are more likely to say they’re best at managing their finances (44 per cent), and less likely to say their partner is better than them (16 per cent).

As we get older, we’re also more likely to say we’re better with money - particularly when we hit the age of 35. In some cases, this may be because younger people are less likely to be so concerned about how their boyfriend or girlfriend spends or saves.

At the start of the relationship, they might feel awkward bringing it up, and while they live separately it might not have a huge impact on them.

However, when you move in together it becomes key, not just because you’re both responsible for paying the bills, but also because you might have joint goals – like buying a house. If they are unreliable with cash, or never have anything to put aside for the future, this starts to have a real impact on you.

If you have children, you become even more reliant on one another, especially if one of you isn’t earning for a while, or works fewer hours. If one of you is unable to manage the budget at this stage, it can have catastrophic consequences.

Likewise, retirement tends to throw up more differences, as couples adapt to living on a lower income. At this stage, 44 per cent of people think they’re better with cash, and only 13 per cent think their partner knows best.

It can cause all sorts of problems when one of you is less money-savvy, especially when it means things like missed bills and debts, so couples have to find a way to manage it. Some will leave all their financial matters in the hands of the person who is better with cash.

This may help ensure they don’t cause problems for one another, but it creates issues of its own. If this has been imposed unilaterally by one on you, there should be questions around fairness and control. In the worst case, it raises the risk that the person in control will use it as a tool for financial abuse.

Even if it is agreed between you, and is done entirely fairly, there are still risks if one of you loses touch with their finances. All relationships eventually end – either through a split or a bereavement – and this is the worst possible time for anyone to have to get their head around money matters.

Instead, there are a few approaches that can help protect your finances, while ensuring neither of you loses track.

It’s important to talk about your finances as early as possible in the relationship. Personally, when I was dating in my 30s, I tended to bring it up on a second date.

It sounds like a terrible idea, but most people were actually really happy to be able to share something they’d always had to handle on their own.

This conversation needs to cover where you both stand right now – including any debts. It should also explore your attitude towards money and your goals. Being bad with cash doesn’t have to be a dealbreaker – which is lucky because almost everyone I asked at that stage was struggling with debts – but you need to know sooner rather than later.

Before you move in with someone who is really bad with money, you need to think through the consequences. If there’s a real chance they won’t be able to pay their share of the rent or bills sometimes, will you cope financially, and are you prepared to do so? These are two separate issues, and you shouldn’t feel under pressure to say yes to either of them.

You should also set some ground rules. For my husband and I, it’s around debt. We’ve agreed not to run a household with any short-term debt, unless it’s for specific reasons and agreed in advance. We’ve also made a pact to be upfront and non-judgmental about this kind of thing. We all make mistakes, but we’ve committed to being honest when we do.

In practical terms, it can help enormously to run a series of direct debits to take the heat off both of you. If you’re both good enough with money to be certain you’ll have the cash in your account when the direct debit comes out, you can share the bills between you and pay them separately. If there’s any risk they’ll run out of cash too quickly, it might be a good idea to set up an account for bills that you both pay into on payday.

If you run this as a joint account, you both have oversight of it, but whether you want to take this step will depend just how bad they are with cash. If there’s a risk they’ll dip into this account or run up debts, you might want to hold it in your name. Similarly, if they have debt problems, a joint financial product will link your credit records, and could make it more difficult for you to borrow. It’s a good idea to talk all of these things through and come to a decision together.

Once you’ve conquered the day-to-day, you also need to have an eye on the future. This includes everything from buying a house to retirement. If you expect to retire together, you need to plan together. This means having a rough idea of what retirement is going to look like, what it will cost, and what you both need to do to afford it.

My husband and I have this conversation all the time. For him, it’s going to be all about cooking, playing the guitar, and sending back unwise internet purchases. For me, it’s going to be about having enough of my own money to be able to do the things that matter to me – which will hopefully include plenty of hill climbing and coffee.