In this article we are discussing the meaning of financial independence and how this is achieved in a partnership. When we talk about becoming financially independent this is when you have enough money to pay for living expenses for the rest of your life without depending on employment or anyone else. So if you want to achieve financial independence then it is useful to have a plan in place so that you can be strategic with how you use your income and move towards your financial goals efficiently. But what if you are in a relationship where you are both working but could not cope financially without each other? Many couples in this situation choose to secure a joint financial position as the cost of living increases. However, to completely neglect your individual finances in favour of a joint position is not a full proof plan.

If you don’t know where to start with your plan for financial independence, consider seeking advice from an experienced financial adviser specialising in women’s finance.

3 things you need to consider on your journey towards financial independence when you are in a partnership

This article will break these down in detail but put simply, here are the three fundamental factors you need to start thinking about now in order to achieve financial independence:

  • What does financial independence mean for you and do you have any specific financial goals you’d like to reach along the way?
  • Are you financially dependent on your partner?
    • If you are, how can you gain some independence and start moving towards your own personal finance goals?
    • If not, great. How can you start moving towards your financial goals more efficiently?
  • Could you cope financially without your partner in the event of unforeseen circumstances preventing them from working & earning?

Why being financially independent is a good idea even if you are in a long-term relationship

I don’t think I’ve ever heard a male say “I want to be financially independent from my wife”. I am sure they do exist, I’ve just not come across them. I have however come across couples where the female earns more than their partner and they take the caregiver role for children. Thus becoming financially dependent as their time becomes occupied with childcare rather than paid work.

A recent study found that one in three women are financially dependent on their partner to some degree. But it does not have to be this way and this isn’t typical with my friends. More often I see female friends wanting to work more but they are restricted due to child care and this can lead to an undesirable situation for the woman if the relationship does not last forever. Additionally financial dependence can be damaging for some relationships. It is thought that couples are 10 times more likely to break up with their partner if their significant other is incapable of managing their finances.

In a situation where someone is totally financially dependent on their partner it is necessary to have protection in place in case that person becomes ill. For this reason we often see couples with strongly intertwined joint financial positions and these can be tricky to pick apart should they decide to separate later on. This is why it is important for all women to consider their individual financial positions.

What you should be aiming for in order to achieve financial independence

Ideally, women should have a plan in place and be aiming for some degree of financial independence before committing to a relationship. To have the confidence that your finances are in order and to have access to your own money, as and when you need it, will take a big weight off your shoulders and you will never have to worry about being financially trapped in a relationship.

An ideal partnership that supports the financial independence goals of the woman would enable her to work at her desired frequency. Furthermore, women who are in a relationship and also working should be using some of this money to secure their own financial positions as well the financial position of their household.

It is important to note that everyone has their own specific life circumstances and obstacles to deal with. So financial independence can look slightly different for everyone. But at the very least women should aim to be financially independent enough to buy themselves clothes or pay for gym memberships etc without asking for money. Total financial independence is not absolutely necessary but some degree of financial independence is necessary for fairness and quality of life. Especially when a woman has had to sacrifice time at work for childcare.

With cooperation, it is possible for partnerships to achieve total financial independence from each other. This can be done through property, investments, pensions, bonds and using different business models. The earlier you put a plan in place the sooner you will achieve financial independence and so it is something I would encourage any couple to think about as early on as possible in the relationship.

What becoming financially independent in a partnership can involve

Another way to think about it is being financially secure. You might be happily married and have no issue with joint finances or being slightly dependent on the main earner in your household. I accept that everyone has a different situation but anyone can become ill and thus unable to work. That is why I encourage everyone to think about having some sort of plan in place to support themselves in doing things they enjoy and in their retirement.

If you’re in a committed relationship the best place to start is by taking control of your own finances. Each person should have their own account and their own responsibility over their money. There is nothing to stop you from supporting each other when you need it but it’s good to get experience being financially autonomous.

The next step is to work out a personal budget for yourself. This will allow you to accurately keep track of your finances and see exactly where you are spending the most. Once you have a budget sorted, start thinking about how you can reduce unnecessary spending, how you can invest in yourself to increase employability, different ways to subsidise your income etc. It can also be useful to work out any joint financial goals that you might have with your partner so you can start to factor these into your personal budget.

Financial independence is about confidence not guilt

If you decide to incorporate any or even all of this advice with your personal financial strategy just remember, you should not feel guilty about striving for financial independence. People have different priorities and having separate accounts allows you the freedom to spend money on what you feel is most important. But it comes with the responsibility of owning your financial decisions and dealing with any consequences.

Ultimately I feel this is an important skill for anyone to learn but especially women who want to feel financially secure. If you’re feeling overwhelmed and don’t know where to start, don’t be afraid to speak to an experienced financial planner to help you take control of your finances and start moving towards financial independence.

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