An article I read in the weekend papers recently really resonated for me both as a family law practitioner, one half of a long term committed relationship and as a friend (but in reality as someone who is inherently interested in the detail of other people’s lives, hence the career). It noted that recent research concludes that financial compatibility is as important as sex in a relationship but also that money causes more arguments between couples.
I agree that financial compatibility is a fundamental but there is absolutely no one size fits all. What works for one couple is total anathema to another. There are, however, essential ingredients for a healthy relationship regarding finances (but also more generally)- communication, understanding, consensus and adaptability. These are key.
Speaking personally I have been with my other half for an extremely long time, formalising that relationship in the intervening period. Prior to taking that formalising step we had had next to no conversations about finances. We just muddled through and it seemed to work. I knew everything about their financial circumstances, they knew nothing about mine. Before getting married we attended a marriage preparation course – truly the best investment we have ever made. It was an honest and open conversation about everything (sex, money, family, conflict resolution and communication) supported by a neutral third party. On their advice we initially tried a hybrid model (pooling everything with separate sole accounts) before we ending up in a 100% sharing arrangement. It felt liberating, it works (for us). We work as equals and, most importantly, a team in the chaos of a household full of young children and the stresses and strains of everyday life. That’s not to say that I don’t sneak the occasional purchase through the door but these are counter-balanced by the deliveries of vinyl, tools or whatever is the latest fad to clutter up our home. Ultimately it’s there in black and white on our bank statements so nothing is really hidden. It’s never been the cause of any argument between us. Those early conversations about finances, our goals, our fears and our principles were invaluable. They set our course, our roles for the relationship and the foundations for subsequent conversations.
In contrast to those interviewed in the article, I would say we are exception rather than the norm amongst our friends and peers. A much more common scenario appears to be the hybrid arrangement or complete separation of finances. My guess is that these arrangements are borne out of marrying later or not marrying at all. I also find that they are more likely in a second or third relationship.
Communication is key
As mentioned above, financial arrangements are a deeply personal matter and truly no one arrangement is better than the other. It is what works best for that couple. What is essential however is that all parties to a relationship are on the same page about those arrangements. My advice is that these conversations take place from the outset, certainly prior to living together and/or getting married. They should also happen on an ongoing basis, particularly after big life events; birth of children, receipt of inheritance or some other financial change of circumstances. These conversations can be supported or supplemented by professional advice from a financial adviser, family therapist or family lawyer. It may be appropriate or advisable for those discussions to be formalised into a cohabitation, pre-nuptial or post-nuptial agreement with the support of a family lawyer, thus ensuring everyone is on the same page and protected as far as possible.
In my experience, those relationships where there is lack of honest and open discussions about financial arrangements can result in those relationships unravelling or imploding over time. The absence of communication or an agreed plan can lead to conflict, emotional distance or distrust. At the extreme end, it can be a factor in situations where there is a financial imbalance, financial control and abuse or other economic abuse.
It is very common for family lawyers to see clients in the initial stages of relationship breakdown who feel particularly anxious or insecure as they have insufficient information about the family finances. This is either because they have not wanted to or felt unable to find out the detail. At the risk of sounding like a broken record, my advice is to have had those important conversations from the very outset but those conversations can and should take place at any time as the relationship endures. It’s never too late. If the relationship is reaching or has reached a point where separation is likely, early advice is essential to understand what might happen on relationship breakdown and what steps can be taken to protect your position. Be informed. Be prepared. That is the case whether the relationship recovers or ultimately breaks down.
Legal Advice
If you require legal advice about a cohabitation, pre-nuptial or post-nuptial agreement please do not hesitate to get in touch with one of our specialist solicitors.
