Law #6: Before Committing to a Relationship, Know Each Others’ Philosophies and Have the Conversation Before All Your Guardrails Come Down
The Law
The relationship between love and money is fraught with more peril than it should be. No matter how difficult, know what type of relationship you’re seeking with your partner regarding money, learn how to have a conversation about it, and don’t be afraid to bring it up in the early days.
Your Keys to Power
When dealing with money in a relationship, there can be as many ways to handle it as there are couples. Nevertheless, knowing some basic structures will allow you to think about the scenarios that will make you most comfortable and empower you to talk with your partner about your money philosophies.
[SHARED OPTION] All money in one pot, equal access. Under this method, it’s as simple as it sounds—all money you make and everything your partner makes land in a single account (or collection of accounts), and you each have mutual, equal access. While you may agree that expenses above a certain amount will require an informal conversation or something as formal as a co-signature, the bottom line is that both partners have equal authority to access everything in your financial pot(s). Of course, you may designate one person to handle bills, travel purchases, or entertainment. However, still, you share equal access with mutual respect for all assets, which also comes with mutual accountability, even for personal purchases (i.e., like gifts you buy for each other).
[SHARED OPTION] All in one pot, expenses out, allowance. This option is distinct in that each partner gets an allowance. So all money goes in, a set amount goes to savings, all relevant expenses come out, and then you split the remainder as an allowance. Allowances are typically issued to a partner in cash or deposited into their accounts, which affords some level of privacy among purchases from each partner’s allowance. Under this method, it’s important to note that both partners have equal access to the community (i.e., shared primary) account(s).
[SHARED OPTION] One pot, one partner’s control, limited to no access for the other partner. Quite distinct from the first two methods, under this scenario, all money goes into a single pot, but one partner handles expenses, while the other partner has little or no access to spend. The partner with little to no access may receive a personal allowance or may have all items supplied for them.
We’ll take a moment to discuss this option. While we never judge, this option may seem to some to be limiting, unwise, and controlling. We understand that because, in some relationships, a partner’s lack of access to finances may be a sign of an abusive or controlling relationship. We share this option because some people enter into relationships desiring this type of financial arrangement—those who don’t have strong practices around spending, those who have proclivities toward activities that result in indulgent spending, those who simply don’t wish to engage with money at all, etc. With each option in this section, there are healthy and less healthy ways to implement the option. So while this option calls for limited to no access to spending, this should never mean zero accountability or restricted access to financial records. Quite the opposite! While limited or no access to methods of indulgent spending could mean that the limited partner does not hold a card for spending or holds a card with limited spending capacity, each partner should always have access to spending records. As an extension, depending on the nature and stage of your relationship, both names should be listed on accounts. In the event of your partner’s death or incapacitation, you'll have access to those funds, and then you will, by default, become the person who manages finances.
[SEPARATE OPTION] Two separate pots. Another option is to keep finances separate. Under this scenario, each person manages their income and expenses in different accounts and commits to a plan to handle shared expenses. Partners make payments to creditors and vendors from individual accounts without mixing funds. Shared costs may be dealt with in as many ways as there are couples. Some may split shared expenses 50/50, while others may choose to split finances based on how much each person earns. For instance, if Partner 1 earns $50,000 and Partner 2 earns $100,000, Partner 1 may take on 1/3 of shared expenses while Partner 2 takes on 2/3 of shared costs. This option does not preclude one partner from agreeing to take on all expenses for both partners, allowing the other partner to keep all their income for whatever they desire.
[HYBRID OPTION] A shared pot with two separate pots. The final option we discuss is a shared pot each partner contributes to monthly with equal access, with the remaining incomes for each partner held separately in accounts that only the partner who earned it controls. This method feels like it’s in the center of the above options. Like in the previous option, partners may contribute to the shared pot in whatever ratio agreed. Like in the first option, the shared pot offers each partner complete, mutual control. Like the second option, the amount each partner holds back in their own account is like an allowance, with complete independent control. A key distinction here is that partners generally put only the amounts needed for shared expenses into the shared pot and maintain their savings completely separate.
***A word of caution. All information about assets is already complex and may be further complicated by different states’ marriage and property laws. This guide is not legal or financial advice but serves as a guiding point for your thinking and discussions about the type of relationship around money you want with your partner.***
Practical Application
Don’t be boxed in. As we’ve said, each couple's options can be unique. Choose the features that are important to you in conversation with your partner and co-create a plan that works for you.
Explore yourself to understand what kind of relationship you want with money. The first step in preparing to have a conversation about money in a relationship is to understand what you want and need in a relationship. Do you like to be actively engaged in financial matters, or do you prefer to have access to records but not engage in day-to-day transactions? Knowing yourself is essential. If you haven’t dug deep with this, it’s never too late. Start by reading, rereading, and then rereading once more the options above, and then ask yourself how each option makes you feel. Write your responses and read them a few days later to see how you feel.
Do not just throw your hands up or cover your eyes. Whatever you do, don’t just throw your hands up and leave it to your partner or leave it to chance just because money or numbers make you want to puke. You owe it to yourself and to your partner to engage.
Love yourself wherever you’re starting in your financial journey. When it comes to engaging healthily about money in your relationship, shame has no place. So many of our present-day interactions with money took root long before we knew how to verbalize our feelings. Drop the guilt and learn to love yourself wherever you’re starting so you can put your energy into getting it right now.
Don’t judge. Believe it or not, you’re already leaps and bounds ahead of a large swath of the population just by reading this message. As you engage with a prospective or current partner about finances, don’t judge where they start in their journey about money. Suppose you’re looking for someone with a more advanced understanding of finances, and you’re in the dating phase. In that case, it’s okay if you decide that you don’t want to pursue the relationship because of their limited financial clarity, but still, don’t judge. If you’re open to engaging with a partner with little financial knowledge, then engage together, again, without judgment. Outside of the legal arena, judgment seldom helps anyone but the judge.
Demand respect and transparency, no matter what kind of option you choose. Whatever option you choose, never give up transparency and respect. Even if you’ve decided not to have much involvement in finances, when you ask a question, it should receive a quality answer that is as thorough as you need it to be to feel comfortable. You should always maintain the ability to review financial records, including bank statements. Remember, regardless of how you engage with finances, your financial future is still on the line, and you need to keep an eye out.
Make sure you understand your partner’s philosophy surrounding money early on. And this brings us to one of the most critical points of this message—develop the financial chops to discuss money in relationships, and don’t be afraid to bring it up. If you’re sitting across that fancy dinner table from someone you should be with, they'll appreciate having this conversation, too, even if they have a bit of catching up to do!
Don’t be afraid to make a plan together. Good job if you hook someone eager to plan a financial future with you! Be open to planning out an option that fits both of your philosophies. That said, also understand the points that are non-negotiable for you, and be willing to keep looking for love elsewhere if you just can’t align.
If you’re in a bind, seek financial guidance. If you need deeper guidance, seek help from a qualified professional. Certified public accountants or financial advisors are excellent sources of information for this topic.
Be strategic about when you have love and money conversations. Four drinks in, in the middle of sex, right after good (or bad!) sex, during a fight—these are not the times to have conversations about such essential things. Take stock of the atmosphere, environment, and your partner‘s feelings when you initiate these conversations. Also, be prepared to give your partner a heads up that you want to have this conversation and be willing to schedule a time for it if they want some time to think first. These aren’t the types of discussions you want to have while catching the other side off guard.
Authority
“Money is either the best or the worst area of communication in our marriages.” - Larry Burkett
“Every girl would like to marry a rich husband. I did twice. But what divides girls into two groups is this question—do you first think of money and then love, or vice versa?” - Hedy Lamarr
"Money only impresses lazy girls. When a woman works hard, a man with money is a bonus, not a ladder to upgrade." - Unknown
"Marriage is a partnership, and couples can’t win with money unless they budget as a team." - Dave Ramsey
"A relationship is like a bank. When you have deposited money, you can make a withdrawal. If you don’t have money, your check will bounce." - Albert Ocran
“The handling of finances is one of the major emotional battlegrounds of any marriage. Lack of finances is seldom the issue. The root problem seems to be an unrealistic and immature view of money.” - David Augsburge
"Don’t look for a rich husband. Be a rich wife." - Ishita Majumdar
“Lay all your desires out before each other—where do you want to end up? Set goals and be willing to compromise at times. Be honest even when it hurts —that’s how you learn to trust each other. Budget. Regularly save, no matter how little.” - Martha Hobbs
"Don’t marry a rich man. Marry a good man. He will spend his life trying to make you happy. No rich man can buy that." - Staness Jonekos
“I can live without money, but I cannot live without love.” -Judy Garland
“Love is worth so much more than money. There are so many people who are filthy rich but have nobody to genuinely love them. Unconditional love is priceless” - Suzy Kassem
“When money realizes that it is in good hands, it wants to stay and multiply in those hands.” - Idowu Koyenikan
“Women who marry for money and men who marry for beauty are equally robbed in the end.” - Harmon Okinyo
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” - Ayn Rand
“The richest man in the world is not the one who still has the first dollar he ever earned. It’s the man who still has his best friend.” - Martha Mason
Our Vote
On this topic, we can have no vote. Each couple is unique and complex in its own right, and what we choose to do in our relationships may not work for you. That said, we will always advocate for these 5 things:
accountability
transparency
respect
conversations about big decisions
flexibility
A special note on flexibility—just when you thought this couldn’t get more complex, here’s a wrench. What works for you and your partner at one stage of your relationship may not be what works at the next stage. For instance, what works for you when you’re in the initial dating phase vs. in a committed relationship living in the same home may, and probably SHOULD, be different. So make sure you’re clear about the stage you’re discussing when having love and money philosophical conversations with your partner and let it evolve. You don't want to run off a potentially good mate by discussing combining finances on the third date if you don’t clearly state that you’re not talking about merging finances tomorrow. If you're bringing it up that early, make sure they know you're digging in to understand how they think about the future at a more committed relationship stage.
Reversal
There can be no reversal whatsoever to this law. You must explore and develop your philosophy about love and money and have clear conversations with any significant other about money, preferably in the early dating, pre-long-term-commitment phase.