HOW COUPLES HANDLE MONEY throughout life's big changes
We all go through stages with our money, but what about the ones you have to navigate with your significant other? SIMONE UBALDI looks at the different ways different couples handle big life stages – and the money that is inevitably tied up in them.
From the first date to romantic holidays, to moving in together and buying a house, through raising kids, breaking up, getting sick and settling into retirement, every phase brings different challenges, ideals and harsh realities.
Here, we ask real people at different stages of life to share their thoughts and experiences on managing money and love.
For some people, a healthy bank balance and strong financial prospects are the most attractive qualities in a potential mate. But gold diggers are the villains of our romantic comedies and water cooler commentary – most people recognise that money can’t buy love. That doesn’t mean you should ignore it altogether.
When it comes to the residual question around whether guys (in a hetero scenario) should pay for dinner on a casual date, the answer, emphatically, is no. As Sophie (27) points outs, it establishes a power imbalance in the relationship before the relationship is even a thing. “I’m seeing someone right now who has paid for everything,” she says. “I find it weird because I can afford to pay for myself. It’s nice to have someone buy you dinner and drinks sometimes but if it’s all the time, it feels a bit controlling or like they have something to hold over you.” There is nothing wrong with generosity at this stage, but it should flow in both directions.
The trickier question for a dating couple is, ‘How will this work if things get serious?’ Are you well matched financially and will it become a problem if you’re not?
When it comes to the residual question around whether guys (in a hetero scenario) should pay for dinner on a casual date, the answer, emphatically, is no.
Sophie doesn’t care how much her dates earn, particularly if things are casual, but she recognises that money will play a role in any long-term relationship. “I like a certain lifestyle so would want to date someone with similar interests and similar income so we can afford to do nice things,” she says. “But it really depends on their situation and why they might not have a lot of money. Is it because they are studying or is it that they don’t have any ambition? I don’t care if someone has less money because their profession is underpaid, like nurses or teachers, especially if they are passionate about what they do. I just think you have to be on the same page in terms of interests and goals. You’re likely to have a similar amount of money if these things are aligned.”
Going on holidays
One of the earliest and biggest tests of an income imbalance in a relationship is when you go on holidays. If your wages are really incongruent, planning trips is a delicate operation, unless one half of the couple has the means and inclination to pick up most of the bill. By this stage, it is less creepy and more of an indication of commitment.
For Steph (32) and her girlfriend Hannah (27), the trick to a blissful four-month holiday was to stick to a budget they could both manage. “We went for AirBnBs mostly, and made our own food as much as possible. We both like cooking, so it was fun,” she says. They saved their coins for galleries and shopping, tallied the bills casually, but tried to keep things even.
When money is uneven, your emotional bond is usually a deciding factor on how you plan to split things. Andrew (40) and Rachel (37) have been together since university and their guiding principle when it comes to holidays is that they just want to be together. They aim to cover things half and half, but if Andrew earns more than Rachel, he’ll happily pay for holiday flights or fancy meals in foreign cities. “I love her and would prefer to have her there with me doing fun stuff,” he shrugs.
Couples that move in together are taking the first tentative step towards a lifelong commitment, with their personal finances in tow. Few people rush headlong into a joint bank account at this stage, but they often make financial concessions to make a joint household work.
Elissa (31) and Matt (30) have just moved in together, but she is working full-time while Matt is studying. They try to keep things even when it comes to major purchases and entertainment costs, but Elissa covers most of the rent and bills. “Matt is a generous person by nature and so we have never been in a situation where we have had arguments over money, and funnily enough, though I make so much more than him, I have occasionally had to borrow money from him!” Elissa laughs. “I am actually saving money living with him so I feel like we are both winning.”
Elissa believes that being in a relationship means supporting your partner however you can, and contributing more financially doesn’t mean you’re not being supported in return. It is a view that is shared by Tanya (34), who works full time to pay the bills while her partner Jason (34) tries to establish himself as a film and television director.
“I am actually saving money living with him so I feel like we are both winning.”
“When it became evident that his part-time job was preventing him from being able to take up professional development opportunities, after talking it through for a long time, he quit,” Tanya says. “The only issue we’ve ever had is with his pride. He did feel a bit weird in the beginning, but once our strategy started to pay off – when he was able to take up an internship with less than a week’s notice – he saw that the new arrangement was getting us both somewhere. Ultimately it’s made us both more committed to our plan, which is for him to forge this path that will ultimately give us both a bit more financial freedom.”
Tanya has faith in Jason and sees her sacrifice as an investment in their future, plus they manage to find their balance in other ways. While Jason is leaning on Tanya financially, he carries more of the load in terms of chores and life admin. And when he has a financial windfall, the money is spent on fun things for the both of them, or goes straight into their shared savings account.
At first glance, buying property with your partner isn’t much different to sharing living costs, but it represents a much higher level of risk and reward. Property is an investment that will gain value over time, so the way you deal with it as a couple is important. It’s an asset that you’re sharing, not just an expense, and it will have a significant impact on your long-term financial security. Mortgages are also a significant financial burden that can place a lot of strain on a relationship.
Buying property with your partner isn’t much different to sharing living costs, but it represents a much higher level of risk and reward.
When they went shopping for a home earlier this year, the biggest consideration for Andy (42) and Lola (36) was how to avoid financial stress. “We were never interested in ‘stretch as far as you can go to get the best thing’ despite getting that advice over and over,” Lola says. “Our preference was to think first about what we know we can manage in terms of repayments, based on many years renting, rather than what we could borrow. In the end, we purchased something that meant our mortgage payments were roughly the same as our old rental payments.”
Lola and Andy have a 2-year-old daughter, which added an extra dimension to their thinking around buying property together. Lola earns a salary and pays the mortgage while Andy stays at home and takes care of their child, however it was critical for both of them that he had equal ownership in the house. “Unpaid work is work,” Lola points out. “The parent who is doing the majority of the unpaid stay at home parenting work mustn’t be disadvantaged or made vulnerable by their lack of income, and therefore the house ownership is in both our names even though the full-time working parent will be paying the mortgage for the time being.”
When they bought their first home, Daniel (40) and Collette (35) had much the same thought, although their respective independence was a much more serious consideration. “We contributed different amounts [to the deposit] but opted to purchase as joint tenants. I wanted an arrangement that would best provide financial and emotional security for Collette and our child, regardless of what the future holds,” Daniel explains. The mortgage repayments are debited from his account, but he and Collette maintain separate everyday accounts too, so that they’re not self-conscious about how they each choose to spend money.
If there is a common point when ‘your money’ and ‘my money’ becomes ‘our money’, it’s when your DNA and my DNA makes a kid. The cost of raising a child in Australia has been estimated to be around $2,000 a year at the low end and $812,000 total at worst. In either scenario there is money to pay, and two people who are responsible for paying it, regardless of their respective incomes. If a couple is functioning well, their finances are usually pooled together in the joint project of raising kids.
“The biggest surprise for me initially was not the cost of the child – especially when they are very small, and if you breastfeed, they don’t cost much at all – it was more that unless you are putting your baby into childcare very early on, one of you will not be working at all for a while, so you go from having two full-time incomes to one or one and a half,” says Michele (41) who has two sons with her partner Daniel (41). “I am finding that as the kids get older, it would actually be more beneficial to work less and have more time to do things like school pickups and making sure homework gets done, and just be around to get all of the domestic crap done that needs doing in a family of four. The money versus time conundrum looms pretty large.”
“The money versus time conundrum looms pretty large.”
Michele and Daniel do their best in two almost full-time roles, with two almost full-time incomes, combining all of their earnings in one account. Diana (37) and Rhys (36) have opted for a similar strategy in raising their four children, though Diana has necessarily been off work for large parts of the last 10 years. “We’ve always had a shared account that all our money goes into. It’s all ‘our’ money. Individual expenses are paid from there and we trust each other not to spend money on things we can’t afford,” she says. She and Rhys are building a life together, and their values are closely aligned. “Because we have so many kids, I sometimes feel like our kids don’t get to do stuff that kids in smaller families get to do because the cost multiplied by four is just too much. But we usually find a way to make stuff that matters to us or our kids work.”
When you’re a couple, it’s easy to pull in the same direction. It’s easy to be selfless and financially self-sacrificing for someone that you love. Of course, that all goes out the window if you happen to break up. And the longer you have been together, the more you are financially entwined, and the uglier the process can be in pulling yourselves apart.
Sarah (40) was in a relatively easy position when she broke up with her girlfriend of three years; they had no children and the house was in Sarah’s name. However, her girlfriend had been contributing to the mortgage for several years and she expected some kind of compensation.
“Agree early on what your financial approach is going to be, and then keep that agreement. Have that discussion before you move in together and cash boundaries get blurry.”
Unravelling themselves involved tough negotiations in a fraught and overheated emotional landscape. “There was lots of documentation of who spent what on what: you commissioned the incredibly lovely and expensive cabinet, you keep it; I bought the couch, I keep it. We each leave with as many bookcases as we arrived with. We each walk out with enough pots to cook a meal, enough plates to eat off,” Sarah explains. “In the end, we both felt a little bit like the other person had got slightly more than they should have, so I reckon it was probably a fair split of assets.”
Sarah and her ex had very different attitudes towards money, savings, expenses and safety nets, which contributed to the end of their relationship. The fall out has made Sarah incredibly cautious about getting into another ‘our money’ relationship and she recommends that couples always keep separate bank accounts alongside their joint finances. “Agree early on what your financial approach is going to be, and then keep that agreement. Have that discussion before you move in together and cash boundaries get blurry. Document what you each bring into the relationship, so that if you split up, you at least walk away with what you started with, or a fair proportion of the remaining joint assets,” she says. “Talk about money. It matters.”
Another point in your relationship when all bets are off is when one of the partners gets seriously ill. There is no talk of equal contributions, financially or otherwise, there is just one very vulnerable person and the partner that holds them together.
Mel (42) was overwhelmed with the cost that came along with her breast cancer diagnosis – not just medical bills, but the cost of taxis when she was too tired to take public transport; the cost of takeaway food when she was too tired to cook; the cost of wigs, scarves and additional childcare.
She and her partner Andrew (44) got through it by living simply. “We rarely went out. I didn’t feel like going out, but it is also isolating not being able to do much. We used savings so we could get by,” she says.
“It was tough not having my own money. Even though our finances are combined, at that stage I wasn’t contributing financially. I was probably more frugal than him because I felt responsible for the shitty situation we were in, even though I knew I wasn’t. He never let me feel that way, of course. I am quite independent by nature and like to feel I’m contributing, so that was difficult for me.” Of course, Mel wouldn’t have thought twice about the financial imbalance if the situation were reversed.
The final (well, almost final) phase in a couple’s money life is retirement. If you’re lucky and you’ve planned well, it’s a period when you and your partner get to take your feet off the gas and enjoy each other’s company, although that’s not always the case. Life is long, financial fortunes can come and go, and a lot of it is outside of our control. But in the best-case scenario, when things have gone well, retirement is when a couple can relax.
John (74) and Lucy (59) have been together for over 30 years and now have two adult children. Like most couples with that kind of longevity, they view their finances as completely entwined, though they have always had separate bank accounts. Lucy pays the bills and household costs with a joint credit card and John transfers money to her once a month to pay the credit card down, keeping a little pocket money for himself and cash to pay the gardener.
They both have substantial superannuation funds as they were able to make extra contributions throughout their working lives, and they own their own home. As a couple, their main financial concern now is how they can use their modest wealth to help their children get a head start.
“We have very similar temperaments when it comes to money and I really think that has made a difference.”
“I bought a house with my daughter Lisa recently, to help her get into the housing market.” Lucy says. Lisa saved a reasonable deposit and with her mother’s help was able to buy a positively-geared investment property. Their son Simon is focused on travel right now, but Lucy and John will help him to buy when he is ready to invest.
Lucy and John are in a strong financial position and they rarely disagree over money, and it’s reasonable to assume that one thing is connected to the other. “We’re not spendthrifts and we are similarly risk-averse,” she says. “We have very similar temperaments when it comes to money and I really think that has made a difference.”
The money stages you navigate with your partner are increasingly complex. The further you go, the bigger the investment, emotionally and financially. But ultimately, it’s not your bank balance that matters most. Having a different income from your partner is challenging, but shared values are what matter most. Don’t be afraid to talk about money, it really is important. And make sure that you’re on the same page when it comes to dollars and sense.
No matter what stage of your finances – or your life – you’re at, Westpac is with you. Check out accounts here, home loans here and credit cards here – and if you’re not sure what’s right for you and need some advice, click here.