This year has no doubt been financially difficult for many couples and families. So having constructive conversations with your partner around money is more important than ever.

There is a lot of truth in the old saying that goes: ‘When money troubles come in the door, love flies out the window’. While shared finances don’t have to be a source of conflict, they often are. In fact, money is often cited as one of the primary reasons why married couples split.

In research conducted by law specialists Slater and Gordon, one in five British couples (21%) blamed money worries on their partner, accusing them of overspending, refusing to save, not budgeting properly and failing to plan ahead for their future.

In South Africa, where many households struggle to keep their heads above water in our current economy, conflicts around money also often drive couples to the consulting room. According to Cape Town-based marriage counsellor Lauren Clucas, many couples don’t know how to discuss difficult or sensitive topics (including finances) in a constructive way. This then ultimately threatens the relationship.

 1. Start (and keep) talking

Whether you’re in a fairly young relationship or ironing out financial woes with a partner of many decades, managing your money should be guided by three principles: transparency, respect for your partner’s ‘money boundaries’ and constant communication.

Start by putting everything on the table, says Clucas: what you earn, where and on what you spend money, what you need to cover the household expenses, how you think about money and saving, and what your financial goals are.

‘Each of you should then get a chance to say how you’ve been hardwired to think about money, how you see your financial partnership working, and exactly what your expectations are.’

Now consider the household’s priorities. ‘Iron out how much has to be allocated for the must-haves (those things the family needs to function) each month,’ Clucas continues. ‘Then look at the fun, creative stuff and put money aside for this as well.’

2. Join forces

In a Policygenius survey, one in five Americans reported that they keep and manage their money separately from their partners. An even greater percentage (24%) don’t share any major financial accounts, while almost 30% of couples don’t know what their partners earn.

As many as 14% of the pensioners who took part in the 2019 Old Mutual Savings & Retirement Monitor said that they had money hidden somewhere that their partners don't know about. ‘When partners have separate accounts, the problem is that they tend not to do financial planning together,’ says Stellenbosch-based business coach Stanford Payne. ‘It also makes budgeting much harder.’

Clucas also believes that finances should be managed together as far as possible, but that there should be some room for independent decisions.’ Talk to each other about what makes you happy, and then allocate a budget towards it every month.’

3. Budget better

If you’re not using a budget effectively, now’s the time to start. It remains the best way to make sure that you don’t overspend. ‘One way of avoiding conflict is to use a budget to determine what you can spend on certain items. This way, both partners are on the same page about how much can be spent on, for example, going out for dinner,’ says business and finance consultant Christiaan Scheepers.

‘A budget will also help to save for a common financial goal, such as your children's education. By clearly setting out your combined monthly income and expenditure, your budget will show what you have left to set aside each month.’ Here, Clucas adds, it’s important to detail every expense and to work out who will cover what.

‘Most partners find it fair to do this in proportion to each other’s income, so that the higher earner contributes proportionately more.’

4. But first, save

When it comes to saving as a couple, it’s worth remembering this quote by American billionaire Warren Buffet: ‘Don’t save what is left after spending. Spend what is left after saving.’

A general rule, says Scheepers, is to save 20% of your monthly income. ‘This doesn’t mean it should all go into a savings account. Paying off a property could also be seen as a form of saving. Just make sure you have some money saved for emergencies.

Top tips for sticking to your budget

• Embrace technology
  Let technology do the work for you. Old Mutual’s Vault22 is a great tool for managing your personal finances. Keep checking in – there’s no point having a budget if you’re not using it.
• Be honest
  If you’re saving towards something, agree beforehand on how to tell loved ones why you can’t attend expensive restaurant dinners for the next few months. The simplest way is to be completely honest: explain that you’re saving for a family holiday, but that they’re welcome to pop in for coffee.
• Don’t compare yourself to others
  Don’t fall into the trap of keeping up with the Joneses. Constantly ask yourself whether you really need something. You’ll often find that you don’t.