Managing money as a couple hinges on open communication and goal-setting
Speaking openly about money with your partner is not exactly romantic. But managing your finances as a team, whether for date nights, gifts, rent, groceries, travel, or a major life goal, is one of the foundations of any good relationship.
Should you combine all your finances into a joint account or keep your accounts separate? The answer isn’t always black and white. It often depends on your individual preferences and relationship dynamics.
How do we manage our budget as a couple if we’re not married?
Not much information is present about common-law relationships in our country. However, a 2020 study by the PSA found that 14.7% of Filipinos were in common-law or live-in relationships.
Despite that number, many financial wellness articles focus on marriage as the sole framework for addressing financial matters for couples, overlooking that unmarried partners, including those in common-law relationships, need to be even more proactive in their financial planning.
Since legal protections may be less defined, open communication, transparency, and sometimes even a written agreement outlining financial responsibilities and asset ownership can be crucial.
We recommend discussing how you will handle shared expenses, debts incurred during the relationship, and what happens to assets if the relationship ends. This is a challenging topic—not one you will enjoy—but addressing these issues head-on can prevent misunderstandings and conflict. This is especially true if there are children involved.
Ensure you speak with your common-law partner about these sensitive topics early on. This will save you a lot of heartache down the road.
Tips for saving and budgeting as a couple: Set shared financial goals: What do you want to achieve together? Buying a house? Traveling the world? Starting a family? Having clear goals will help you stay motivated and focused. A joint account can be used to facilitate this process.
- Create a budget: Track your income and expenses to see where your money is going. There are many budgeting apps and tools available to help you. We also offer a budgeting tool here on Earnest.
- Communicate openly: Talk about money regularly and be honest about your financial concerns. It can be “nakakahiya” to talk about being in debt, for example, but it’s important that you share this with your partner so they know how they can help you.
- Be flexible: Life happens, and your financial situation may change. Be prepared to adjust your budget and goals as needed.
- Seek professional advice: If you're struggling to manage your finances, consider seeking advice from a financial advisor.
Joint versus personal account: Finding the right balance
Many couples find that the most effective approach is a combination of both joint and personal accounts.
A joint account operates similarly to a standard account and allows anyone named on the account to access its funds and can use it to transact. A personal account is an account held solely by you or your partner.
Having both allows for shared financial responsibilities while also respecting individual financial needs and preferences. A common strategy is to use the joint account for shared expenses like rent, utilities, groceries, and shared savings goals (like a down payment on a house or a dream vacation).
Personal accounts can then be used for individual spending, hobbies, personal debts, or gifts for family and friends. This hybrid approach offers both the convenience of shared finances and the autonomy of individual financial management.
Being in love while managing your finances as a couple
Being a couple, regardless of marital status, can be challenging, but it’s also an opportunity to build a stronger relationship and work toward your shared dreams.
By communicating openly, setting clear goals, and finding the right balance between joint and personal accounts, you can create a financial plan that works for both of you. Remember, financial wellness is a journey, not a destination. Be patient with yourselves and celebrate your progress along the way. With a little effort and teamwork, you can achieve your financial goals and build a secure future together.
We talk more about finances in our Earnest e-book.
Disclaimer: This article is for general information purposes and does not constitute formal financial advice. Always do further research before making financial decisions and seek professional advice from a certified personal finance counselor. For more information, read the Earnest disclaimer here.
