Managing Money With a Partner When You're Expecting

Sean MacNicol

July 27, 2016

November 13, 2018

Managing Money With a Partner When You're Expecting

 

No matter how well you manage your money, the arrival of a new-born will change your financial plans. Handling finances with a partner can also be confusing and that's why it is important to have a plan in place to make sure you always have the money you need when your family starts to grow.

Co-Management of Money

 Financial planning can be a difficult topic to discuss with your partner or family, but a clear and transparent plan can prevent arguments and overspend in future. Make sure you:

  • Set a limit: Purchases over a certain threshold should be discussed with your partner. Agree on that limit.
  • No secrets: Be open with your partner about your spending habits, your debts and your investments.
  • Discuss money regularly: Review your budget whenever you get a chance. If your arrangement isn't working, adjust it and try again.

Equal Partners 

Regardless of who makes more money, who is better with money, or who is interested, partners should both understand the finances and be involved in decision making.

Understand Your Money

If you haven't already, you should first get a clear understanding of your personal finances. Use Money Dashboard to get a full view of your income and outgoing expenses to see where your money is being spent. You may find you are overspending in ways you didn't expect, and can adjust your routines to save money.

A Plan That Works For You

Different couples will want to manage their finances differently. Some may be comfortable spending each other's money. Others prefer to have some privacy and independence. Here are four different options for managing money as a couple:

1. Separate But Equal

If you and your partner want to keep your money separate, devise a system where both are paying a fair share. Some bills can be in the name of one partner, some in the other. You can trade off paying for shopping, and pay half the cost of purchases into each other's accounts.

  • Plan how regular spend and costs that pop up will be handled fairly.
  • The split doesn't have to be 50/50, especially if income or childcare responsibilities aren't equal, but both partners should agree what is fair.
  • Consider your partner when making purchases and financial decisions. Even if they don't have access to your money, you both have a responsibility to provide for your child.

2. Share Everything

Joint bank accounts exist for couples who share money. Open one that suits you, and use it for receiving income and paying bills. Remember that this means you'll both be responsible for debt and overdrafts, so it is vital you understand each other's spending habits and trust each other not to overspend.

3. Three Pots of Money

Both you and your partner keep your own accounts, as well as paying into a joint account. The joint account pays for household bills and baby-related expenses and you can do what you want with your own money, allowing for privacy and independence.

  • Credit accounts are not good for joint spend. A credit card can have more than one user, but one person needs to be the main cardholder, and is liable for the other user.
  • Agree on how much each person should pay into the joint account and how regularly. Your budget will show you how much you will need for joint expenses.
  • Both of you are liable for joint debts. Keep the joint account well-funded.

4. Personal Allowances

This method works when one of you is the main earner, while the other handles parental care. The breadwinner transfers an agreed amount regularly to their partner. After joint costs and baby costs are covered, the partner receiving the allowance can do with the leftover money as they wish.

  • Agree how household and baby costs will be paid: by the main earner, split equally, or through a joint account.
  • Look at your budget to determine how much the allowance is and how regularly it should be paid.
  • The allowance is not a favour, or employment. You are both part of a working team, covering separate responsibilities.
  • Both partners must be comfortable with the arrangement.
Sean MacNicol

Engagement Manager

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