Menu
Why both partners should be involved in financial planning
In many relationships, it’s common for one partner to take the lead in managing finances. Whether it’s due to a natural interest in numbers, a greater understanding of financial matters, or simply out of habit, one person often ends up handling the bulk of financial decisions. However, while this approach might seem efficient, it can also be risky and limiting.
As a financial adviser, I often see the dynamics of financial responsibility in relationships. What I’ve observed time and time again is that when both partners are actively involved in financial planning, the benefits are significant.
Not only does it lead to more informed and balanced decision-making, but it also fosters a deeper sense of trust and shared goals within the relationship.
The reality of financial dynamics in relationships
In relationships, financial planning tends to fall predominantly on one person. This itself isn’t necessarily a problem but it does create potential vulnerabilities. Life is unpredictable, and if the person who handles the finances suddenly becomes unable to do so – whether due to illness, accident, or other circumstances – the other partner may find themselves unprepared to manage the financial aspects of their life.
Moreover, this imbalance can create a knowledge gap that might lead to stress or misunderstandings in the relationship. When only one partner is involved in financial decisions, it can unintentionally create a sense of isolation or exclusion for the other. Over time, this can contribute to financial misunderstandings, missed opportunities, or even resentment.
The importance of joint involvement
Involvement in financial planning doesn’t mean both partners need to become experts in investing or financial markets. Rather, it’s about both individuals having a clear understanding of their financial situation, their goals, and the strategies in place to achieve them.
When both partners are involved, several positive outcomes tend to emerge:
- Shared responsibility and accountability. Financial planning becomes a joint effort, which naturally leads to shared responsibility. This shared approach fosters accountability and encourages both partners to be more engaged and informed.
- Better decision making. Two heads are better than one. By discussing financial matters together, couples can combine their perspectives, experiences, and knowledge to make more well-rounded decisions. It also helps in recognising each other’s financial and other values and priorities, leading to a more cohesive strategy.
- Greater financial security. When both partners are knowledgeable about their finances, they are better prepared to navigate life’s challenges. Whether it’s dealing with unexpected expenses, planning for retirement, life planning for families, or making investment decisions, having both partners on the same page creates a stronger, more secure financial foundation.
- Stronger relationship dynamics. Financial transparency and joint planning can strengthen a relationship. It fosters open communication, trust, and a sense of partnership, all of which are crucial for long-term relationship success.
How to start involving both partners
If one partner has traditionally managed the finances, it might feel daunting to start involving the other. However, it’s never too late to start. Here are a few steps to consider:
- Regular financial check-ins. Schedule regular meetings to review your financial situation. These don’t have to be long or complicated, but setting aside time to go over accounts, bills, and financial goals can be very beneficial.
- Educate together. If one partner feels less confident about finances, consider learning together. This could be through financial literacy courses, reading, or even working closely with a financial adviser who can guide both partners.
- Set joint goals. Financial planning should reflect the goals and dreams of both partners. Discuss what you both want to achieve – whether it’s buying a home, planning for children’s education, or retiring comfortably – and create a plan together to reach those goals.
- Use technology to stay connected. There are many tools and apps available that can help both partners stay informed about their financial situation. Jointly using these can help ensure both partners are aware of day-to-day financial activities and long-term progress.
Conclusion
In relationships, financial planning should be a shared responsibility. While it’s natural for one partner to take the lead, ensuring that both individuals are involved is key to achieving financial security and harmony. By working together, couples can build a strong financial future and, in the process, strengthen their relationship.
The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.
