Money Matters: Making Financial Decisions as a Couple

Hi Money-Makers!

Mrs Money here, with Mr. Money next to me. Yes, it’s both of us! We’re sitting in our favourite cafe eating delicious mini croissants while sipping on our weekend coffee.

We have reached a stage in our blogging where we felt that it was time to share it beyond close friends and family. We also generally tend to get positive feedback from them, so we were looking to get some constructive ideas from a wider base on how we can improve our content and style to benefit more readers. (To all of you reading, please keep the comments and feedback coming!)

Mr. Money is a big fan of Reddit, particularly after seeing a documentary about its founder, Aaron Swartz. He recently discovered an active thread on personal finance in Malaysia, and found it to be a really interesting space to learn about how Malaysians think about money. We decided to put up a post linking our blog, requesting for advice or suggestions for improvement.

We received some excellent feedback, and this post is in response to them. We particularly liked this one:

It’s interesting but imo you aren’t leveraging the biggest niche you guys have in the space. Maintain the current content focus but add in another angle regarding financials with a partner. E.g. combined or joint? Approach to large purchases? How do you handle disagreements? If you never argue, why is that? Pre-planned budget which is the focal point of alignment? Lucking out and finding a partner who literally wants the exact same thing you do etc.”

It made us realize that we never addressed how we approach joint finances and how we think of financial goals as a couple. So here goes!

Photo: Jamie Hodgson/Getty images

Deputy Women, Family and Community Development Minister Hannah Yeoh recently shared that on a yearly basis, financial issues come up tops as the reason marriages end in divorce, with nearly half of the marriages breaking down due to financial problems. Clearly, this is a major issue facing many couples.

We addressed this subject very early on in our relationship. After around 6 months of dating, we decided to get a joint credit card (which was essentially a supplementary credit card from one of Mr. Money’s banks as unmarried couples are not allowed to open joint accounts in Malaysia). We got this because we wanted to share our common expenses such as eating out and travelling, but it lead to some interesting discussions and reflections around how we think about money and expectations in a relationship.

Unlike me, Mr. Money eats out almost every day. When we moved in together, that meant that I ended up eating out more than I usually do. Dining regularly can be an expensive affair when living near the city centre.  Earning much less than Mr. Money, I expected him to take most of the bills, particularly the more expensive ones. Truth be told, part of it was also likely ingrained gender expectations – as the man, there is an expectation for him to be the primary financial provider. Growing up in Europe however, Mr. Money did not share the same views. Instead, he had an expectation of a more equal relationship – which also included the financial aspects. 

After many discussions, and reflection and soul-searching on my part, I realised that a more equal financial relationship was actually in line with my values too. I have a stable job and a decent income, and prided myself for being independent. There was no reason for me to be financially reliant on him or anyone else. We regularly spoke about our views on money and Mr. Money had some really compelling principles that spoke to me: 

  1. There is a strong power dynamic from money that can easily negatively shift the balance in any relationship. The person who is dependent on the other for financial security is inevitably in a weaker position, and will only continue to be so the longer relationship progresses. There are many power dynamics in a relationship and financial power is just one of them – but often a critical one.  
  2. You must always be able to adapt to who you are with. For instance, if you are with a group of friends with all different levels of income, the choice of venue or activity should be based on the capacity of the person with the least financial means so no one feels like there are forced to make decisions that put them outside their financial comfort zone. In essence, everyone at the table must be comfortable and able to take the bill wherever we choose to go.
  3. You should always be able to live within your means and be self-sufficient. Living according to someone else’s lifestyle creates dependency, stifles your ability to be independent and creates expectations of a lifestyle that you may not be able to sustain in the event of changes within and outside the relationship.

This led to a discussion on whether we should be adapting our financial choices based on what I was comfortable with. There were times I felt a pinch splitting the bills and eating at places I wouldn’t normally choose to go to. When I expressed this, Mr. Money also realized that he didn’t need to eat out as often and in some of the more pricey restaurants, and was instead  happy to start making choices that suited my budget. We had a similar discussion about adjusting our budget on travel.

While we have broad guidelines for how we approach joint expenses, it’s not set in stone. Valuing experiences over things, it has become a couple’s tradition for us to take the other for holidays on birthdays and treat the other to meals on occasion – which is always based on our individual budgets and financial capacity.

Another area where we had extensive discussions was around investments. I started exploring the idea of investing in a property prior to even meeting Mr. Money. After around a year and a half of dating, we decided that it would be nice to own and live in a property together (as I moved in with Mr. Money who was living in a property he already owned). Our pooled income also meant that we had a larger budget. Our initial budget was based on equal contribution, however we left some room to increase it if we really liked a property, with Mr. Money agreeing to top up the remainder. The agreement was that the house ownership would be apportioned accordingly. We saw many properties and really liked a few of them enough to consider making an offer. We even met several banks to explore financing options. 

After around 3 months though, Mr. Money started feeling a little uncomfortable at the prospect of owning a second property in Malaysia in view of the fact that property was already the largest part of his portfolio. At the same time, I also began to wonder if it would be better to have my first investment property in my name alone.  We eventually decided that it was a wiser financial decision for both of us for me to proceed to purchase a property alone as originally planned. (interestingly, the first property we saw together and loved, ended up being the property I bought a year later anyway!)

So there you have it. These are some of the main differences in opinions we have had when it comes to spending and investing so far, and ways we resolved it. It’s an ongoing discussion and we’re sure there will be more points where our opinions diverge.  But truth be told, we feel lucky to have found find a partner with similar money philosophies and values. That means that discussions about money have never descended into full-blown arguments. We also recognize that a large part of this is that we are privileged to be relatively financially stable individually.  

At the end of the day, there are many different ways to organize finances as a couple. Not every couple has equal financial footing, or may want to organize their finances fairly equally. The way we are organized it fits our values both individually and as a couple. In our view, the most important thing is that it needs to be an open and honest conversation. It should take place as early as possible, and regularly revisited. Otherwise, unspoken expectations and assumptions fester and only rise to surface when crisis hits, potentially causing a upheaval in your relationship which may have been totally avoidable. 

If you are in a relationship, how do you and your partner think about finances as a couple? We’re really curious about this, so please leave a comment below!

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