Being in a relationship and growing money together

Making money plans with your partner

Being together brings many new opportunities to build wealth that we wouldn’t have on our own.

Moving in together or getting married may mean we share earnings, costs and money plans, but it can also bring its own financial challenges and risks. By planning finances together as a couple, we can make sure both our needs are met and avoid trouble later on. 

Like all aspects of a relationship, the key is getting on the same page and sharing the decision making. And the earlier we have that money talk the better!

Different attitudes to money

Couples may not ever stop to think about whether they have similar attitudes to money, but it’s important to understand what makes each person tick. What are the different needs each of us has?

It's normal to have different opinions about money – especially if we come from different financial backgrounds. It's how we embrace our differences that’s important.

 

Some people are happy to live with credit cards or a maxed-out overdraft. Some might want to pay for everything, leaving the other person feeling in their debt.

There can be issues to resolve when one partner has a much higher income than the other, too.

Whatever the situation, sharing decisions about spending and saving, and discussing money openly, helps avoid arguments and tension. More importantly it can really boost mutual wealth over a lifetime by agreeing a common approach to money choices.

To find out more about your own approach to money, and your partner’s, try our money personality quiz

Planning your future and money together

1

Growing wealth together

A relationship brings opportunities to build wealth in all sorts of ways. Even just financially speaking, it costs less to live together and share expenses than living on your own. So by being life ‘partners’, you will have opportunities to save and invest that wouldn’t be available otherwise. 

Setting goals may take more effort in a relationship, but it’s essential so you both know what you’re working towards as you grow your net worth. You’ll also be more prepared for those changes that come along which impact your spending choices. 

If you're partnered up and planning finances as a couple, both sides need to be involved in the process. It’s all about getting on the same page and making sure our families will be taken care of in the future.

2

Setting goals together

You might be choosing goals such as travelling overseas, buying a home or starting a family. It's important to make sure we set financial goals together and agree how to achieve them.

For example, if both of you are in KiwiSaver, you both could be entitled to a first-home grant after three years. Depending on how much you've contributed, this could be quite a boost to your deposit – as much as $20,000!

To get on the same page – try working through the Goal planner together.

3

Sharing expenses

If you’re moving in with a partner or are already living together, it's likely there will be shared bills and other joint expenses. You’ll need to agree on a system for paying these – will one of you take responsibility for paying them all, or will you divide them up?

As partners, there are different possible setups, from totally pooling everything you have to keeping things entirely separate and sharing expenses like flatmates.

Over time, couples often find themselves combining finances more and more.

This could involve setting up a joint account to cover bills and other expenses, or a savings account for shared goals like holidays.

See our guide on going flatting for more information about sharing expenses.

4

Compromise gets results

When two people are managing their money together, it's only natural that there'll be differences of opinion. So it’s important to talk about finances as a couple openly and honestly, and be prepared to compromise. Often the two perspectives can bring out many more solutions when planning finances as a couple.

The more we discuss money matters openly and honestly with each other from the start, the more we avoid stress later.

Questions to ask your partner

Do we have a joint emergency fund?

If not, do we have another way to access cash quickly?

We recommend setting up an emergency fund. Work through Step 1 of the 6 steps to get yours started.

Do either of us have a superannuation scheme?

What happens to the scheme should one of us die?

If we’re making a financial plan for retirement together, will our plans be sufficient if we both live well into our 80s or 90s?

Work through your retirement plans with step 5 of the 6 steps – find out what you're on track to have and if it will be enough!

What happens if we’re separated – by death or otherwise – before reaching retirement age?

You will want to look at what cover is right for you.

As part of this, setting up your Wills and Power of attorney will be important.

In the event of separation, find out what steps you can take in our guide.

Have we considered life insurance or income protection insurance in case either of us can’t work?

Life insurance or income protection insurance might suit – make sure you do your research and talk to the experts to make sure you're getting the right cover for your situation.

If we share a mortgage, will payments be covered by mortgage or life insurance if one of us dies?
Are there debts that either of us are liable for?

As well as making sure you're covered, you may want to put a plan together to tackle your debt.

If you need some extra support to get on top of things, reach out to the good people at MoneyTalks.

Getting legal advice

Seeking independent legal advice can be worth doing.

The New Zealand Law Society website has free guides on a range of topics such as:

  • Making a will and estate  administration
  • Powers of attorney
  • Buying or selling property
  • Living together
  • What happens if a relationship breaks up
  • Family trusts

If either you or your partner owns property (either together or individually), there is also relationship property law to think about. Find out how the law affects this on the Family Court website.

 

Protecting what we own and owe

When you've just met someone new, splitting up is usually the last thing on your mind. But everyone is subject to the Property (Relationships) Act after three years – earlier if you have children or one of you has made a significant contribution to the relationship, including a financial contribution or giving up work for the other.

Living together as a couple doesn’t necessarily mean in the same house all the time, so this law may apply sooner than you think.

Generally speaking, all ‘relationship property’ such as wages, savings, cars and other assets is split 50/50, unless you make your own property agreement.

Find out more about property agreements on the How to Law website.

Separate property vs relationship property

Things that are ‘separate property’ rather than ‘relationship property’ can include things you owned before your relationship, or that have come to you from outside the relationship, such as a gift or inheritance.

However, separate property can in some cases become relationship property.

For example, if one partner owned a house and the other partner then moved in, that house could become relationship property. Or in the case of combining savings from before the relationship with savings made from income earned during the relationship, the total savings could be counted as relationship property.

Any financial decisions you make now, even small ones such as buying something together on HP or guaranteeing someone else’s loan, could have unexpected consequences in the event of a break-up.

Those who already has a large amount of savings, or access to a family trust or an inheritance, may want to consider a property agreement to manage the risk of a relationship split affecting those family assets.

Talk to a lawyer or get free advice from a Community Law Centre.

 

When a relationship ends

What happens after a split, financially speaking, depends on the state of bills, savings, property and debts. It’s a good idea to keep track of debts and bills during the relationship so there are no surprises if things come to an end.

This includes knowing about all HPs, car loans, overdrafts, credit card or other debts each partner has entered into – as individuals or as a couple. You could be chased for repayments if your name is on any of these agreements or you agreed to be a guarantor.

If an ex-partner doesn't pay debts that are in both names or that you have guaranteed, it could also affect your credit history and make it difficult to borrow money or buy a house in the future.

This net worth calculator can help with a stock-take of what each partner owns and owes.

Here are some ways you can protect your finances after a break-up:

  • Get professional financial and legal advice
  • Make sure your pay goes into your own bank account (not a joint one) and change password and PIN numbers your partner may know
  • You may need to freeze or close every store card, account, loan or debt you’ve set up jointly, including ones where your partner only had authorised user rights.
  • Be careful when closing accounts to check where automatic payments for HP, rent and other bills are coming from. You’ll be charged dishonour fees if these fail.
  • Write everything money-related down in case there are disagreements later.
  • Get any joint debts and agreements (such as a rental agreement) transferred to one name.
  • Agree distribution of assets, including the name on the title of registered assets such as cars and houses.
  • A few months after the break-up you should check your credit record. You can request a copy from each of the credit rating agencies – see Credit reports for details.

Here's some more information on separation and losing a partner.

 

Where to go for help

Don’t know where to start?

Check out our 6 steps Get Sorted programme to get you on track.

Head to the 6 steps