Relationships & money

Love and money

""Are you moving in with someone, opening a joint account, or starting a joint loan or investment? It pays to go into love and money matters with your eyes open.

Here are some tips on managing finances with your partner.

Talk to your partner about money

Talking to your partner about money is important, whether you have similar or different spending and saving styles.

Here are four crucial issues to discuss:

  • Relationship goals: Work out your relationship goals with your partner. Consider what goals you share: is marriage, buying a home or having a baby on the horizon?
  • Current financial situation: Take stock of your income and expenses, assets and debts and your credit rating. Start thinking about ways you may be able to reduce spending so you can save for your goals, and how you can reduce any debts faster.
  • Attitudes to spending and saving: Are you a spender or saver? What about your partner? Your background and experiences will influence how you think about money. Understanding how your partner approaches financial matters will make it easier to create a money plan that suits you both. Try to find common ground so that you are working together.
  • The financial controller: Who will handle the finances? Will one person look after household expenses, mortgage and savings, or will you share the responsibility? Make sure you're both happy with the decision.

Video: Zoe avoids the money problems that can destroy relationships

Video about buying a home.

Zoe talks about our tools and shares her tips on mixing love and money.

Zoe uses:

Transcript: Zoe avoids the money problems that can destroy relationships

Case study: Bill and Jen get their finances together

" "Bill and Jen have been dating for 12 months and are ready to move in together. They expect it will be cheaper than renting separate apartments.

When it comes to their finances, Jen is happy to keep track of the household bills. Bill will research the costs of buying a house, to see how they can afford to buy one together in the future. He has also agreed to look into high-interest savings accounts to get them started on saving a home loan deposit.

Bill and Jen decide to keep their own transaction accounts, and open a new joint account for household bills. They also decide to keep their own credit cards for personal expenses. This gives them freedom to buy their own things and keep their personal shopping separate from joint expenses.

Take action together

Smart tip

Don't sign anything you don't understand. Always read documents thoroughly.

If you're serious about sharing your finances, here are some things to consider:

Use both names

  • Put both of your names on services like electricity and gas. This will make you equally responsible.
  • Putting joint assets and liabilities, like your home and the  corresponding loan, in both names means you will both have an ownership interest in the asset and both be responsible for the debt.
  • Think twice before putting your name on a loan that will only benefit your partner. See loans involving family & friends  and joint accounts for more details.

Share costs

  • If you have private health insurance, it could be cheaper to share a couples plan than pay for two singles plans.
  • Insurers will often give family discounts on multiple policies, such as for car insurance, so shop around to see if you can get a better deal by using the same insurer for several policies.

Plan for a shared future

  • Get organised by making a list of all your accounts, loans, investments and insurance. Keep all your financial information in one place so you both know where it is.
  • Work together on a household budget. This will help both of you see how much money you can spend and how much you can save or invest in your shared goals.
  • If you are married or in a de facto relationship you may be able to split off some of your super contributions to your spouse. This may be beneficial for your retirement plans. If you have a non-working spouse you may also be able to claim a tax offset for after tax spouse contributions.
  • Make a will and keep it up to date. See our wills and powers of attorney page for more information.

If you earn less income than your partner, you may feel you don't have a right to make decisions about where the money goes. Talk to your partner about how you feel. You should work as a partnership, including when it comes to money.

Case study: Danica takes care of herself and her relationship

" "Danica is in a long-term relationship where she is the main breadwinner and her partner is often out of work. Money is often a source of tension in their relationship.

"What I've learnt is that it's important to talk to each other and be open about your finances. I think you've also got to have shared goals as far as money goes, but it's critical to have your own goals too. Just because you're in a relationship doesn't mean you should lose yourself financially."

Know the facts about sharing money

Don't be blinded by love - be aware of how much money is coming in and going out. Here are some facts you may not be aware of:

  • A joint loan doesn't mean you're only liable for half the debt. If your partner defaults, you may be liable for the whole amount, including fees, interest and charges, even if your relationship ends.
  • If a utility service such as electricity or gas is only in your name, then it's your sole responsibility to pay the bills.
  • Think carefully before you guarantee a loan for your partner or family members. If things don't go to plan and the borrower can't repay the money, you could be asked to repay any loan you've guaranteed, including fees, interest and charges. For example, if the guarantee is secured against your home you could risk losing the home.
  • Ignorance is not a defence. Signing papers you know nothing about, just because your partner told you to, does not make you any less liable for any loans or guarantees you may have agreed to.

Shared credit cards

If you are thinking about sharing a credit card with your partner, make sure you understand the different types of accounts available.

Joint credit cards

A joint credit card is held in both names. The bank will consider the incomes and credit histories of you and your partner when you apply for a joint credit card, and you will be equally liable for repaying what's owed on the card. A joint credit card will be suitable for you if you both share the same financial goals and trust each other to do the right thing. However, if your partner goes on a spending spree without your knowledge, you are both responsible for repaying the debt. If you can't repay the debt, it will affect your credit rating as well as your partner's.

Primary and secondary credit cards

If you already have a credit card in your name, you can arrange for your partner to have an additional card on your account. This can be useful if you have a better credit history or higher income than your partner.  If your card is linked to a reward scheme, points earned on the primary and secondary cards will usually be credited to your account. However, as the primary cardholder, you will be solely liable for any debt on the account.

Cancelling shared credit cards

If you want to cancel a shared credit card, there are steps you will need to take to cancel the card properly.  These steps will depend on whether you have a joint credit card account, or whether one of you is the primary cardholder, and the other is the secondary cardholder. See how to cancel a credit card for more information.

Joint bank accounts

Opening a joint bank account is a big step in your relationship. Visit joint accounts to help understand the risks and benefits, and how to close a joint bank account, so you can work out whether it is right for you.

Get informed

Get professional advice before:

  • Guaranteeing a loan
  • Signing your name to a loan which will only benefit your partner
  • Becoming a partner in a business

Find out more about going guarantor and co-borrowing.

If you want to maintain some financial independence, think about keeping your own bank transaction account and credit card in addition to any joint accounts.

Prenups

If you have assets to protect or children from a previous relationship to support, you may consider entering into a binding financial agreement (BFA), also known as a prenup. BFAs can help if you're worried about who should get what if the relationship ends. They are only binding if you have both signed the agreement and received legal and financial advice before signing.

Take care of yourself

Get help

If you need help with debt or money problems, think about seeing a financial counsellor. The Department of Human Services has a free Financial Information Service (FIS) that can tell you if you are entitled to any benefits, especially if your circumstances have changed.

Consider relationship counselling

If you have broader relationship conflicts related to money, a relationship counsellor may be able to help. Read more about managing relationships on the Australian Government Family Relationships website, or visit the community-based support service Relationships Australia. There is also useful information about your legal rights for dividing property on the Victorian Legal Aid website.

Know the signs of financial abuse

Some people find themselves being pressured by partners, family or friends to hand over control of their money or property. This may be financial abuse.

If you think you may be experiencing financial abuse, seek assistance from the following organisations:

  • 1800 RESPECT is the national family violence and sexual assault counselling service. It is a free, confidential service available 24 hours a day, 7 days a week. Call 1800 737 732 to speak to a professional counsellor.
  • The Family Relationship Advice Line provides information and advice on family relationship issues and parenting arrangements after separation. It can also refer callers to local services that can provide assistance. Call 1800 050 321 between 8 am and 8 pm, Monday to Friday, or 10 am to 4 pm on Saturday local time, except national public holidays. () 
  • Lifeline provides crisis support services. Call 131 114, 24 hours a day, 7 days a week.
  • WIRE Women (Women's Information and Referral Exchange Inc.) are the Victoria-wide free generalist information, support and referral service for women. WIRE Women has conducted research into women and financial abuse.

Keeping a sense of your financial self is key to a strong relationship. Don't be afraid or embarrassed to speak to your partner about money issues, and work on sorting them out together.


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Last updated: 16 May 2016