Marriage should be a joining of finances

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Relationships aren't like they used to be a generation or two ago.

The path to a ceremony is a more gradual one, with couples typically living together beforehand and sharing expenses.

Women, through both necessity and choice, continue to earn an income after marriage and are confident in managing their own money.

The result is young couples are increasingly managing their financial affairs separately.

Making a life-long commitment should be a trigger to review how money is managed within a relationship.

Over a lifetime, a degree of financial interdependency can arise, especially if there are children.

The ideal outcome is that each partner's needs and wants are both respected and protected and money is managed effectively to achieve common goals.

It is very common for partners to feel differently about how much money should be spent now rather than saved to spend later and how much money should be kept on hand as a slush fund in case of unexpected expenses.

Some people are uncomfortable using credit cards, while others feel nervous about having debt.

To avoid ongoing arguments about money, there needs to be agreement on these money basics. It is very important each partner continues to have access to money of their own.

There are two ways to achieve this. Incomes can be paid into a single account for joint expenses and goals with a transfer to each partner for personal spending.

Alternatively, incomes can be paid to separate accounts with a transfer to a joint account for expenses and goals.

In a healthy, committed relationship, allocating a high percentage of income to joint expenses and goals enables money to be used effectively.

- Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free e-books, go to moneymax.co.nz and moneymaxcoach.com.