The most important decision when sharing finances

Couples often fall into sharing finances without truly discussing the arrangements they make. There is an important action they need to take.

Back in the days of traditional marriage, the household had one financial situation. It wasn’t “his and hers”, it was the household.

(Actually, if we’re being really traditional, it was “his”, but that’s beside the point here.)

This made things simple on the surface. There was one account, or one set of accounts, for the whole household. If one person spent money, they spent the household’s money.

Now some traditionalists would say that this is the correct—indeed, only—way to manage a household with a committed partnership.

But as some of you may know, I disagree.

I’ve identified four (well, five) ways that couples can combine and share finances.

But that rather overlooks the most important part of the discussion.

If indeed there ever was a discussion.

Review

As I see it, there are four main ways that couples can combine their finances:

1. All-In: Everyone combines all money and treats it as a single account (or set of accounts).
2. Semi-Joint: Some accounts are shared, while each has some accounts that are individually managed.
3. Divide and Conquer: All accounts remain separate.
4. Allowance: One person makes all decisions and doles out money to the other person.

And I divide Semi-Joint into two different sub-categories:

2a. Mostly Joint: The majority of money and accounts are shared, while some are separate.
2b. Mostly Separate: The majority of money and accounts are individually managed, while some are combined.

Every couple is acting in one of these capacities. Prove me wrong.

The important decision

While I say every couple is acting in one of the above decisions, that doesn’t mean that this decision happened intentionally.

Many couples fall into habits around money without thinking about it too much. Maybe more traditional people think that All-In is the only option. Or couples where there’s a history of financial infidelity will default to Divide and Conquer, without really considering the benefits or drawbacks.

Being intentional with money is one of the most powerful ways of being successful with money. If you’re not being intentional, how will you get to where you want to go? You probably won’t.

Therefore, the most important decision that couples need to make around sharing finances, is to actively consent to the financial arrangement.

And the way I see it, consent can’t come passively. Consent isn’t just “agreeing”. Consent is enthusiastic, active, aware of all the considerations and making the decision regardless.

If you have never really talked about your financial arrangements, you haven’t really consented.

Have the talk

The way to move to consent is to have a conversation with your partner.

I think couples should be having regular check-ins anyway, maybe every month or so. This can just be one item on the list; it doesn’t need to be a big weekend summit.

The conversation can be very simple at first: you can discuss whether you like the situation you’ve gotten into, and whether there might be elements you want to adjust.

I’m not suggesting that you should change your financial arrangements. You may decide that you like what you have set up; you did set it up after all.

But just knowing that there are alternative financial arrangements when sharing finances can give you ideas on where you want to move to. Perhaps you want to share more accounts. Perhaps less. Perhaps you are Semi-Joint, and want to become more combined by default, or separate by default. There are lots of options.

Like everything in relationships, these are conversations that are important to have. And they can go deep too. Money connects to every aspect of our lives, so I wouldn’t be surprised if a conversation about family finances can turn into discussions much bigger and more consequential.

But make no mistake: this is a good thing.

Consent to consent

I recognize that conversations about money can be fraught, possibly really hard. And you may want to avoid them.

But the other side of this potentially difficult and awkward discussion is a greater sense of purpose and connection in your relationship, a better sense that you are working toward the same things. Being more aligned with money correlates to being more aligned in all aspects of your relationship. That seems worthwhile to me.