Money Manners: 'What's the best way to divide your finances in a relationship?'

Money Manners is Honey Money's weekly column that deals with money etiquette matters that can be the cause of many an awkward encounter.

Submit your Money Manners questions to Jo Abi at jabi@nine.com.au

This week's question comes via a 9Honey reader who is wondering about the best way to manage money in a long-term relationship.

Question: 'What's the best way to divide your finances in a relationship?'

What's the best way to divide your finances so that you can easily put money away for holidays, the future, the kids, emergencies, bills as well as still have money left over to spend on fun stuff?

I don't understand how to divide it into heaps of accounts. Or it could just be because I'm financially illiterate.

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Advice: 'You can do this the easy way, or the hard way'

There are a number of different way to organise money for joint expenses in a relationship. It's a matter of deciding what works best for your relationship.

Most couples calculate an amount they each place in a joint account for regular shared expenses such as household bills. The rest can be done together or separately.

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Some couples choose, as it sounds you have, to set up several accounts for each of your financial goals. This works for some couples who sit down each pay period and make their contributions into each account, leaving some money for their own use.

Others prefer to keep joint accounts to a minimum, one for regular shared expenses and one for each of their children.

Costs such as holiday and emergencies don't necessarily have to be combined. This is something you can manage individually and simply access the money needed ahead of holidays and emergencies out of your own funds.

When it comes to saving for the future, once again this depends on the strategy you decide on. You can set up an account into which each of you contributes money for the future or you can manage this individually.

Couples don't have to combine all their funds or set up complicated networks of accounts unless it works for them.

You sound as though you'd like to keep it simple, so perhaps stick with one for regular shared expenses and one for each child, and they rest can be paid as needed out of individual funds.

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The important thing to do is to talk about this regularly, keep it fun and focused and make sure it works for both of you. And make sure you both have your own money to spend!

The stronger your communication about matters such as money in your relationship, the stronger the relationship. And the longer you are together, the more your money management styles will evolve.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.