It takes two to tango, as well as to plan finances as a couple. Last week, we discussed the importance of having your partner on board when it comes to planning the finances of a household. Now, this week, we’ll share with you ideas on how to go about actually funding your accounts.
(1) The “my money is your money” route
One approach is that all the earnings by both partners are owned by the couple and a single unit, no matter how much one person is earning. This promotes a “partnership” approach in that it becomes both partners’ responsibility to manage spending as, at the end of the day, the wealth of one of them is the wealth of both.
(2) The “my money is my money” route
Another approach is that each person keeps what they earn, simply. This brings the responsibility of savings down to the individual level — after all, can you be mad at your partner’s extravagant shopping spree if it’s their money to do with it as they please? We’d say perhaps so if it’s coming at the expense of funding dual expenses such as rent. For couples that go down this route, financial planning is essential to make sure that each couple is aware of the joint expenses and ensure that those are handled first.
(3) A bit of both
In the Middle East, traditionally the male party of the couple is expected to cover the shared family expenses, whilst the female keeps her income. This is is a combination of both routes. Though, as the younger generation becomes more and more influenced by Western media — and, therefore, their culture and values — it’s common for both individuals in the coupling to “chip in”. Now, this may not be 50:50 — it can even be a ratio that’s agreed upon.
In all cases, setting a budget and tracking essentials is essential to make sure you’re on route with your personal finance management. In which case, spending using a card (instead of cash) is essential to help you track.