Money and relationships: how to plan your finances fairly as a couple

1. why financial fairness is important in a partnership

People often worry that the topic of money in a relationship will jeopardize the happiness of the relationship or destroy the romance. Hardly any other topic is as explosive for couples as money. And many a relationship has failed because of it - especially if the subject was kept quiet. After all, if just one of the partners feels that they are paying more bills unfairly, this can quickly lead to bad blood, and the house is in trouble.

Financial fairness in a partnership is crucial for a harmonious relationship. Especially if you live together or are planning to start a family. Because if both partners feel that the financial contribution is fair, this strengthens trust and a sense of teamwork.

It's not about who earns how much, but how expenses and savings are distributed. 

2 Discuss finances openly as a couple: but how?

"You don't talk about money", as the saying goes. So it seems inappropriate or not polite to talk about money. But open communication about money is important.

Of course, it's not always easy. If one of the partners earns less and is worried that he or she won't be able to afford the vacation, for example, but doesn't dare say anything and simply books the tickets and accommodation, this can lead to underlying stress and arguments in the long run.

Talk honestly and transparently about your finances with your partner, even if it is unfamiliar. This will help you avoid misunderstandings and make better decisions together.

Openness creates trust, which is important in any relationship.

Couples who know how much the other earns and what expenses they can afford can plan their future better.

Remember that it's normal to have different views on money. The key is to remain respectful and willing to compromise.

It can help to schedule regular conversations about finances to stay on track and make adjustments as changes occur. 

2.1 Set common financial goals

A trip to South America, buying a house, the children's education: sit down with your partner regularly to talk about your financial goals .

Where do you have common goals and can you save on them together? With clear goals and regular discussions, savings can be prioritized and misunderstandings can be avoided.

Regular check-ins, staying the course and looking again and again: Are these still our common goals? Or has something changed?

2.2 Plan your joint household budget well

Sit down together and make a list of all your monthly expenses, from rent, electricity, insurance and subscriptions to streaming services to diapers, baby food, etc. Don't forget to include variable expenses such as food and leisure activities .

Think about it together, 

One approach that often works is a percentage split based on income. For example, if you earn 60 percent of the joint income, you also pay 60 percent of the costs. This often feels fairer than a 50/50 split, especially if there are large differences in income.

Don't forget to plan a buffer for unforeseen expenses, such as a broken washing machine.

A joint account for household expenses can also help to keep finances organized.

3. joint accounts vs. separate accounts: Advantages and disadvantages

Joint accounts offer the advantage of transparency and can make everyday financial life easier. You can track spending more easily and plan joint goals, such as a family vacation, more effectively. However, there could be conflicts if one partner spends more than the other expects.

If you have separate accounts, on the other hand, you retain your individual financial freedom and each partner can spend their money how and on what they want. This could be particularly useful if you have different income levels. The downside is that it can be more difficult to coordinate joint spending or savings goals.

Which speaks in favor of a joint account:

1. joint accounts promote transparency and trust in the relationship. 

2. joint accounts facilitate budgeting and planning of joint expenses.

3. separate accounts can create a sense of separation and lack of collaboration.

4 Separate accounts can make it more difficult to share financial responsibility. 

5 Joint accounts can simplify the management of joint invoices and obligations. 

What speaks against a joint account:

1. joint accounts can lead to conflicts if the spending priorities are different. 

3. joint accounts require regular communication and coordination of expenses.

3. separate accounts offer individual financial freedom and independence. 

4 With separate accounts, each partner can pursue their own financial goals. 

5 Joint accounts require trust, which can be a challenge for some couples.

A combination of both options can also be a good solution to ensure both transparency and independence: the 3-account model.

4. 3-account model

The 3-account model works like this: you and your partner each have your own account and also open a joint account. Each of you retains control over your personal account and transfers an agreed amount to the joint account.

The joint account covers all joint expenses such as rent, food and childcare.

The 3-account model is suitable for couples who both want to contribute to the household but also want to remain financially independent.

5. financial planning with a child: the role of parental leave and part-time work

If there are children in the household, parental leave and part-time work play a decisive role in financial planning in a partnership.

Because if one of you goes on parental leave, your income will change considerably. Get together early on and plan together how you want to deal with the reduced income.

Part-time work can also be a solution to reconcile work and family life, but often at a financial cost. Think with your partner about how you can adjust your expenses or possibly take advantage of state support. A joint account for household expenses can help to make finances more manageable.

5.1 Pension points for child-raising periods

If you bring up children, you will collect valuable pension points that will have a positive effect on your future pension. You receive one pension point per child for the first three years of child-raising. These periods are referred to as "child-raising periods" and have a direct effect on the calculation of your pension.

This is particularly important for parents who do not work or only work part-time during parental leave, as they still acquire entitlements to the statutory pension. 

Deal with the topic of "financial security in old age" at an early stage. It is best to clarify together who will claim the child-raising periods in the pension insurance and how you can divide them up fairly.

5.2 Career break / part-time

A career setback is an unexpected break or interruption in a career, e.g. job loss, lack of promotion opportunities in the company or stagnation or setbacks in a career, which can be triggered by taking time out to raise a child.

Think early on about what it could mean for your career if you take parental leave and stop working:

Good planning and communication can help to avoid a career setback:

If you live in a partnership, you should think about this together with your partner: How will we divide parental leave between us? Who will take parental leave and for how long?

Please note that fathers can take more than two months of parental leave.

Also consider together how you can distribute income fairly or whether one partner can temporarily take on more responsibility at home to save on childcare costs. A transparent household budget helps to avoid financial bottlenecks.

Also think about how you can plan for the future in the long term, e.g. through savings plans or insurance.

And last but not least: Let your employer know how you want to plan your parental leave. Openness and transparency will build trust between you and your employer. This can help to maintain a positive working relationship and potentially promote future career opportunities. Communicating your plans early on can also make it easier to return to work.

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5.3 Distribution of care work

It's best to think about how you want to divide up the care work before the baby arrives. Sharing the care work in a partnership with a child can be a challenge, especially if one or both partners work.

For example, you could agree on fixed times when each partner takes on certain tasks. Perhaps you make a weekly schedule that is adapted in turn.

Write down your plan and your ideas : What goals and values do we have - and how do we want to implement them in everyday family life? And what do we do if things don't work out the way we imagined? What solutions and alternatives do we then have?

Communication is the key to avoiding misunderstandings.

When the baby arrives, it can be very helpful to regularly reflect together on what is going well and where there is room for improvement. This makes both partners feel seen and heard.

Remember that flexibility is important as your family's needs may change over time.

These can be positive effects:

1. a fair division of care work promotes equality in the partnership.

2. both partners feel equal in their role as parents.

3. there is more time for personal interests and hobbies.

4. children benefit from a balanced parent-child relationship.

5. stress and overload is reduced for both partners.

These can be challenges:

1. it can be difficult to find a fair division that suits both.

2. traditional role models can lead to conflicts.

3. an unequal distribution can lead to dissatisfaction and disputes.

4. work commitments can make it difficult to find a balance.

5. a lack of external support can hinder implementation.

5.4 Basic parental allowance, parental allowance plus, partnership bonus to close financial gaps

Various support options are available to close financial gaps during parental leave, including basic parental allowance, parental allowance plus and the partnership bonus.

Basic parental allowance can help you, especially in the first few months after the birth of your child. It covers at least part of your income.

Parental Allowance Plus is another option that allows you to benefit for longer, especially if you want to work part-time.

The partnership bonus offers an additional incentive for both parents to share the care of the child and work part-time at the same time.

These models can create a good basis for fairly distributing the financial burden in a partnership and sharing responsibility for the family budget.

6. five tips on how to avoid arguments about money

Money conflicts in a partnership, especially with a child, can quickly become a psychological burden and put a heavy strain on everyday family life. 

But a few tips can help you avoid arguments:

1. open communication: Talk about finances regularly. Transparency regarding income, expenditure and savings goals helps to avoid misunderstandings.

2. joint budget: Create a joint budget that covers all important expenses and savings goals. This will help you keep an overview and plan better.

3. separate accounts: In addition to the joint account, separate accounts for personal expenses can be useful. This gives each partner financial freedom.

4. set savings goals: Define shared savings goals, such as vacations or emergency funds, to work toward something together.

5. regular review: Sit down monthly to review the budget and expenses. This will allow you to make adjustments and keep an eye on financial goals.

Sometimes, however, a good overview of your finances and regular discussions are not enough and money is simply too tight. Perhaps due to job loss or separation or because you have taken out a loan that is too expensive. Don't hesitate and get help. The sooner you do, the easier it is to find good solutions.

7 Our income and budget advice

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