A woman’s guide to having financial equality in your relationship
Did you know that Money is a top strain in relationships, especially for women?
As Financial Advisors, we understand that dealing with financial inequality in a relationship is very common and it can cause a real strain on your partnership. Many factors play into this and it is important to nip it in the bud so it does not cause more stress. It could be that both of you may have clear financial goals – both personally and as a couple – but you may be working off the assumption that your partner knows what your financial intentions are. It is important to effectively communicate these goals to avoid financial uncertainty and create an open and honest environment. This article will help you to identify some of the financial issues that may come up in your relationship and offer solutions, to help you create financial equality in your relationship, as a woman.
What does financial equality look like in a relationship?
Financial equality makes for a happy relationship in which both parties have a mutual understanding and respect for each other, entering all financial conversations with practicality and compassion . Both parties should be aware of what the other one is paying for; one might be paying the main bills and the other may be paying for extras such as holidays or children’s clubs. As women, finances can be an important signifier of independence and to join (or not to join) your finances with your partner entails a lot of important decisions and seemingly boring conversions. Whatever you spend your money on, it all adds up and so having a clear idea of who takes what role is important. Open conversations with your partner about your financial equality (or lack thereof) are essential for an honest and healthy relationship.
How can I implement financial equality in my relationship?
Practically managing the money is essential for your financial equality to be maintained. You may already be doing some of these things without realising but it is important to remain mindful of your finances.
- Managing your finances completely separately. This method of implementing financial equality is usually adopted at the start of a relationship – possibly before you have moved in together. This is a good way to protect your personal finances, especially as a woman.
- Having one joint account in which both parties equally contribute. This means paying for things 50/50 when they are joint and paying for things individually when it is for them personally. There is no cross-over in personal financial goals, and your individual financial goals would remain completely separate. This is a great way to implement financial equality, particularly if you and your partner are earning similar salaries and you are both able to pay a similar amount into a joint account. You could even implement rules on using the joint account for example exclusively for shared expenses such as holidays.
- Paying a specific percentage. This is good for dealing with changes – perhaps you paid 50/50 before but one person has had an unexpected drop or increase in salary so both of you may choose to pay 50% of your salaries into a joint account (it might be that one pays 40% and the other 60% of the amount or more depending on the situation). This means a fair percentage can be agreed upon even if a person earns less, they can still contribute the same percentage as the other person.
Joint accounts and financial equality in your relationship as a woman
It can be hard trying to manage your money solely through a joint account, which all of your money goes into. Alternatively, a joint account that is just for expenses and two personal accounts can be proportioned by percentage or a fixed amount, for example, both parties once a month adding £50 to the shared account.
Sometimes one party becomes the main wage earner and the other does not have a salary yet, the main earner gives the other an allowance for a weekly shop; this could cause an issue simply by using the term ‘allowance’ which can seem patronising. This is especially the case if you are a mum and have left work to raise your children or only work part-time. If there is a main earner, transferring money to the other party’s individual account is a healthy way to first of all show your partner you trust them and second of all to make sure the other party has as much say and input as possible. When looking at a joint account or multiple joint accounts it is imperative to decide what type of joint account you want to be using in your relationship to avoid any confusion.
You should also think about what assets you already have, for example, if you are a business owner will you share this with your partner? Whatever you decide as a woman, protecting your assets and really considering what you feel comfortable sharing and what boundaries you want to put in place with your partner can be a healthy and fulfilling experience when done with open and honest conversations.
Financial equality in your relationship as a woman
Whether you choose to join financial assets completely, join the necessary assets or keep them separate entirely, the most important thing is to keep everything as transparent as possible. Finding a way that feels comfortable for both parties so that one does not feel left out can go a very long way in open honest communication about finances. This can be different for women when self-employed, especially at the beginning as income can be up and down or sporadic; it can be difficult to be clear about irregular income. Running your own business means there are more financial factors to think about – are you looking to make your romantic partner a business partner? Is your business something you would rather keep separate from your relationship? These are important things to consider when thinking about financial equality in your relationship, especially as a woman.
Evolution Financial Planning understands your needs and worries, so for help with organising and planning your finances, reach out to a female independent financial advisor to help guide you through the process.