Agony Aunt: Fear of the joint account

Dear Janine

This is going to sound like a moan, but it is actually a financial question.

My partner isn't much of a saver. For a few months I can get her to save about 25 per cent of her salary and then she falls off the rails.

It's causing quite a few arguments, as we want to buy a house and she needs to save her half of the deposit.

Generally, we get on quite well when it comes to spending as she hunts down good discounts. 'Saving' is apparently frustrating with the goal being so far away. I think we will have a deposit in two years.

I'm not sure I can risk setting up a joint account with her, because I'd worry about losing control. Have you got any tips for how to get her back on track?

ANSWER:

Fear of the joint account

There was once a dinosaur-age where couples chucked all their money in joint accounts, saved one salary and spent one. No pre-nups, just the currency of trust.  I've no idea how we survived, but some of us did.

These days, it's far more common to come across partners who maintain a completely independent financial status. 

It's easy to admire the younger generation for their extreme independence and sense of fairness. But often I feel they've got tendencies to over-think and over-complicate what ever they touch.

From intricate calculations of household bills, to their insistence on a 50-50 regime of house deposits or equity-splits down to two decimal places for relationship property purposes. 

Financially out of kilter

In your case, a sense of admiration prevails, because the pair of you sound so wonderfully normal.

Everyone is a bit out of kilter when it comes to money. You have goals and most importantly, your flaws are complimentary.

One of you has a better savings ethic, the other has a good spending ethic. I like the way you compliment her on her ability to get the best deals. This isn't a relationship in trouble. It's just finding its balance.   

According to researchers (Rick, Cyder and Loewenstein) our saving and spending habits are programmed into our brains.

An area called the 'insula' controls this. Insula stimulation can stop you spending, as it's triggered by an unpleasant experience.

So those of us with more insula activity tend to be savers and those with less, spenders.

At it's extreme, savers with the most activity end up with regrets and spenders end up in financial trouble. 

Two wheels won't slip off the rails

When your partner saves 25 percent of her salary, how much disposable income is she left with?

Is it the same as yours?  Percentages don't reflect real money. In 50-50 relationships the higher earner usually has less stress, less frustration and fewer 'off-the-rails' moments.

Many people will be adamant about 50-50  arrangements. It's deeply set in their sense of worth and it can take a lot of humility on both sides to realise that operating as a pair might be the calmer journey.  Talk to her about this. 

Each of you could take control of what you are good at.

You take the lead on savings levels and keep her informed of current mortgage rates, repayment levels and start looking at houses to make the goal real. Buy a few things for the house to stash away.

Talk about the two-year goal in front of friends and family. Your partner leads on the spending decisions with leftover household income.

It might make her feel an important part of the team with a role she is good at.  It will empower her with a greater sense of responsibility.

Couples are rarely money-equals

With the 'equal-and-independent' method of saving, it worries me that financial imbalances between two people are constantly under the microscope.

It's rare for any couple to be money-equals. Marriage is a chaotic series of giving and taking that creates some semblance of 50-50 across the decades.  Trying to break each part down and measure it, can surely only make a relationship competitive, rather than collaborative. 

The beauty of the big joint washing machine is you stop focusing on who put more clothes in the barrel and just look at all the suds you've produced together.

Trust and communication can make it work. You needn't fear that joint account. Try it and see if it brings you together. 

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.