How to talk about money with your partner

On The Money is here to help with your problems. So, with Valentine’s Day around the corner and in true agony uncle tradition, this month I’m helping some readers with their relationships.

These two questions showcase some pretty common worries when you’re getting serious with your significant other. I’m sure you’ll relate and hopefully you can use my answers as a chance to chat to your partner about how you both manage your money.

How do we split our income when our baby arrives?

Q: My partner and I are expecting our first child and I’m wondering what the best way to share our finances is. We live together but don’t have any joint bills, as we live with my mum. We just pay her rent individually, and we are in the process of saving up for a mortgage deposit. 

We have the same monthly income as we work at the same place, but come maternity leave, things are going to change dramatically where I am concerned. I really don’t want to ask my partner to send me money all the time as I’m so used to being independent and having my own money. What would you advise? - Emily
 
A: Congratulations! That’s going to be such an exciting time for you, but also a big change to your finances.

I’d suggest that first of all you both work out a combined budget. Though you don’t have any bills to pay, there will still be some ongoing costs, not to mention the significant expense of having a child.

Any joint expenses, from supermarket shopping to baby items, could be best paid for from a joint current account. You’ll both be able to see where the money is going and on what. So if you need to spend it, it’s there—just make sure you stick to your budget and don’t overspend.

You then need to chat about what money you’re going to keep for yourselves. Obviously your combined income is going to be less than before, so you’ll have less to spend in this way. But if you can agree how this remaining cash will be split, you can then work out if he’ll need to give you some extra money each month, or whether you’ll keep more of your maternity pay and he’ll pay more of the joint expenses.

I always think it’s best to keep that money in individual accounts. If he is sending you money, get it set up as a standing order so it’ll always come through without you needing to ask. This way you can spend it as you wish and when you want.

Should I pay my boyfriend’s mortgage?

Q: I’m hoping to move in with my longterm boyfriend next month, into a house he owns. He is expecting me to contribute, which I am happy to do. But he wants me to pay half the amount of the mortgage each month, and I’m not sure this is wise as I will essentially be paying for his house. What’s the best thing to do? 
- Daniella, 36

A: This isn’t the most romantic answer, but ultimately it comes down to what could happen to your relationship down the road. 

If you were to get married or enter a civil partnership, then you’d automatically get legal rights to the property, even if you didn’t at a later date take out a joint mortgage.

But if this didn’t happen and you broke up (or he died before you), he’d still have his property with some of the mortgage paid off. But you’d not only lose your home, you’d be back to square one getting on the property ladder.

I think it’s worth exploring something called a cohabitation agreement. This can set out who owns what at the start and how much each of you will be contributing to the mortgage from that stage on. 

This gives him the protection for the equity he’s already built up, but it also means that you’re able to get that money and any gain on that portion at a later date if things don’t work out.

However, to do this properly it could cost a grand or more. There are DIY options, though it’s still better that both of you seek independent legal advice. 

Hopefully it’ll end up being a unnecessary piece of paper, but I think it’s worth going down this path to give you security.

My top tips for talking to your partner about money

I think the conversation most couples avoid is the one about money. But it also happens to be one of the most important. 

Because we often leave it until crisis point, talking about money tends to happen when we’re angry or upset. That, however, is not going to be constructive!

Try to reserve judgement here, and make sure you actually listen to your partner. And don’t leave the chat until late at night when you’re already tired.

If you can, try to head off difficult chats and get in there early. Even before you start talking numbers, try to get a sense of how you both feel about money. What were finances like growing up? Have you had problems or worries in the past—or even now? Do you think of yourself as a spender or a saver?

These conversations will help you understand why you and your partner act in certain ways. Maybe not having much money as a kid makes you save more than you need to now, or perhaps you’re scared to ask for help and explanations, and so you just keep on spending.

From this base, move on to talk about your joint plans. Do you want kids at some point? Would you like to retire early? These goals will help shape your joint approach to money, and be the bedrock for future chats.

And you should do these regularly. Go though the joint bills, refer back to your goals, and discuss any changes you might like to make. This should help keep conversations about the money part of your relationship healthy. 

Got a money question for our resident expert? Email it confidentially to onthemoney@readersdigest.co.uk

You can follow Andy on his Twitter

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