Navigating Love And Money - podcast episode cover

Navigating Love And Money

Feb 15, 202414 minSeason 1Ep. 19
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Episode description

Money and love can be a strange mix. It can feel like lots of unspoken rules and pitfalls start popping up when your emotional and financial lives come together. That’s true even when things go smoothly. But what if they don’t?

Amy James, a Legal & General Product Manager, joins Kia Commodore to share how she navigated this journey. When Amy and her partner Dan decided to settle down together, he revealed that he’d built up some pretty big debts. That was hard enough for him to admit. Sorting it all out and getting to a much better financial place was even more of a challenge.

Amy tells their story, explains how everything changed again when they had a child and talks about how they manage their money today. She also shares some excellent tips for talking through difficult financial situations with your partner.

You can play the podcast and find other useful content on Legal & General’s website:

https://www.legalandgeneral.com/podcasts/a-little-bit-richer

Kia and her guests share their own personal thoughts and opinions in this podcast. These might be different from Legal & General’s take on things. They give financial guidance for a UK audience that’s relevant at the time of recording. It’s general best practice, not the kind of personalised advice you’d get from a financial adviser.

See omnystudio.com/listener for privacy information.

Transcript

Kia Commodore

When I was a kid, I always got told it was good to share, but does that mean money too? A few episodes back, we were talking about financial abuse and Katie made a point saying that it's important not to be put off sharing finances with a romantic partner. There are benefits to it, although it can still get messy if

you don't have a solid plan in place. So, today, I'm talking to Amy James, a product manager at Legal &; General. When she and her partner Dan decided that they'd like to settle down together, he revealed that he had built up some significant debts. Her story is about how they worked together to get to a stronger financial place.

Amy, great to have you here, but can you give us a brief overview of your experiences sharing your finances with your partner, Dan?

Amy James

Dan and I met when I was 22, and I think we have hit every milestone along the way in terms of how we have shared our finances. Early days, I mean, very much like most couples, what was mine was mine, what's his was his. We lived very independently

and dated like that for about a year. And then, the role that I had took me to a point where we had to decide do I want to move to the same city as him or was I going to stay? So, we decided that I would move in with him in his flatshare with some of his other friends, so that was kind of our first step into, okay, so what does that mean for our shared finances?

At that point, again, we just contributed to each other's little pot that goes into the shared household. And about a year after that, living in a shared housing, I was like, " Great, I'm saving loads of money here," so I'm either quite happy to do this, or actually we've done this for a year, do we want to live just the two of us? I think that was the pivotal first conversation that we had about what's next for

both of us. And it was at that point that Dan said he had a little bit of debt, not that much, just a few thousand pounds. It was enough for me to worry about, but go, " Okay, that's fine." We're clearly in different financial positions. So, at that point, we said, " Well, we don't want to stay living in a house share, but we'd like to get our own place. We're not ready to jump straight into buying somewhere

together because we're not in the same financial position." So, the agreement was Dan would keep paying off his debt and he said he was in control of that, but I would keep saving towards a house that we would eventually buy, so we moved in together. About coming up to 12 months from having kind of moved in together and renting, I saw one of the apartments in our building come up for sale and I thought, " Well, we

love where we live. We're close to town. It's a lovely building and I've probably got enough money to buy that with a mortgage." That was kind of the next conversation, so we said, " Yep, that's great." I don't think we revisited sort of how far Dan had come in

his debt. We were probably still kind of fairly ignorant and living in happy bliss of each other's finances, but feeling like that comfortable arrangement was underneath of it, that Dan was paying off debt and I was saving. So, it was no surprise to him that I had enough savings to kind of put down that deposit. So, we put

down the deposit. We said we'd buy the house. Dan was very adamant that it would be my house and he didn't want to go on the mortgage, that it was going to be for me. He couldn't contribute towards the deposit and he felt that was fair. I was like, "

All right, I don't really mind." I knew that I was buying it as our first home that we were going to live in together, so whether he was on it or not kind of didn't bother me, but I understood better when it came to that kind of first month that we were ready to make that exchange, everything's culminating, and Dan started to look quite worn out, quite stressed.

It was very visible on him, and one day, I came back from a work trip and he just broke, and he confessed that actually he had a lot of debt. He had been paying it off in the last year, but what might've been 3 or 5, 000 pounds of debt was not. It was more than his annual salary in debt.

Kia Commodore

Wow.

Amy James

Yeah. So, yes, that was a critical milestone.

Kia Commodore

Wow. So, that is quite a journey that you guys have been on, and I mean, that is quite a revelation. I can't even imagine how it is, you think one thing in terms of the amount of debt your partner's got, and then it ended up being something completely different.

Amy James

Yeah. Quite a shock.

Kia Commodore

If we talk about that process then, what was the most important and helpful thing that helped you through going through getting your first property and just having a conversation?

Amy James

Well, it was once we were in that situation that, I mean, everything has to come to a head at that point, doesn't it? Because it was a question of, well, do I continue to buy this apartment? What if we can't afford it? I'd intended for us to live in it and share those expenses together. I was able to afford that mortgage by myself. That's the point. So, that was comfortable and we agreed that, okay, that's what

we're going to do. I was going to continue to buy the house, but there was no more of me saying, " Okay, that's fine, Dan. You just carry on in the

background paying off your debt." We had a much more visible shared sense of each other's finances, but also it forced us to sort of embrace this idea, an understanding that yes, we could have probably kept independent and that might've meant that I could afford things that he couldn't afford or I'll pay for you to go on holiday because I want us to go on holiday together, but

actually, we knew we were doing this as the next step of our lives and our partnership together. So, I looked at that as I want our finances to be shared together, so if we've got all of this money to pay off, I see it as you do, but I want to help you pay that off because what happens to you is going to impact what happens to me.

But I think we found a mutual respect for one another and in the steps that we took, so we rented out one of the rooms in my new apartment and my brother came to live with us, so that helped pay towards it. Dan had to sell his car, but we lived in the City Centre, so it was one of those... That was a heartbreak, but we lived with it. Exactly. But those were big commitments. He also quit smoking and

that was huge because that was a big expense. So, there were a couple of big lifestyle changes between us both that went towards paying off all of that debt.

Kia Commodore

I think that's really good. Hearing your story I think is probably reminiscent to a lot of our listeners. It's such a mature conversation that you had and it's a difficult one, and we said it before on this podcast that money is such a taboo topic, and especially talking about it when you're not in a great place, people

shy away from it. So, it makes sense why maybe he wasn't forthcoming initially, but you two putting together that plan and saying, " You know what? We're a partnership. We're going to figure this out together." But equally, you not taking full ownership of his debt, which you could have have stepped in like you said and said, " You know

what? I'm just going to help you pay off." But coming together and helping him manage his money I think is really key. I want to bring it to your everyday now, so what does that arrangement look like now with your everyday finances, the two of you?

Amy James

Well, we fast- forward five, six years now actually. We jumped. We paid off all that debt. We set ourselves that goal that we said we'd pay it off in three years and we actually paid it off in just under three years because we were getting married, and we made a big kick at the end to say, " We want to start our lives. I'm married without all of this debt behind

us." Now, we have our finances completely joint actually. Slowly, our finances just came together to the point where everything was going into that joint account, so there was no more sort of just splitting the bills. Both of our incomes went into it, and that's made a big difference for my everyday now because we now have a little

girl. She's three. And when it came to big decisions, again, like maternity leave, suddenly I'm the one who's at the financial detriment because it's my income that's taking a hit, not Dan's. And actually, well, there was no question that that was just a joint hit. It wasn't my hit to take on my own and my finances. Our household income took the burden of having to take the

maternity leave, and then what does childcare look like? All of that comes from our family finances as opposed to his or mine.

Kia Commodore

Well, I think it's great, like you said, your approach to finances now. I mean, congratulations on getting it all wiped off and having the wedding that you wanted, and being able to do that, I think that is such a testament in

your journey and your story together with the partnership. But I think even just seeing how you guys manage your money, and join your finances, you obviously have your strong money management that you've got yourself innately, and I think there's so many different things that people can do. Whenever I talk to people who were a couple, there are things

like money dates. I'm not sure if you guys do money dates where you kind of get-

Amy James

We do.

Kia Commodore

... together and talk about it.

Amy James

Yeah. I don't know that I'm as glamorous as calling it a money date.

Kia Commodore

But you come together and talk about finances.

Amy James

We absolutely do that, yeah. We sit down and we look through what are the bills and kind where we at, and we have that open conversation about what is our next goal? So, it was really obvious when it was paying off debt, but once we paid off debt, then it was, well, actually we're going to get married. Do we want to save for a wedding? Do we want

to save for a new house? We have. We've bought a new family home, rather than our little first apartment. What were each of those goals that we were saving towards? Or if we weren't saving sometimes at any point, it was just we were just building up a bit of a... What's the word? A comfort blanket.

Kia Commodore

Yes, yes. Like an emergency fund, a rainy day fund that you can fall back on.

Amy James

A rainy day fund, exactly.

Kia Commodore

Amazing.

Amy James

We both love our travel, so it would always be, " Okay, if we save that, then maybe actually now it's nice things that we can save for. We can save for nice holidays and go on nicer trips."

Kia Commodore

That's really nice. I think it's so great to see that. You mentioned there that you guys have got an amazing child, a three- year- old.

Amy James

We do, yeah.

Kia Commodore

Amazing. So, how did things change for you as a couple when you had your child? Because obviously that is massive change, and did you have to review, who paid for what, and what expenses were paid out of where?

Amy James

Yeah. I guess for us, because we had come together so jointly in our finances, we didn't have to change an awful lot when I got pregnant and when we had her. Actually, childcare just became another expense that had to come out, and obviously, we have to have that conversation and review. We've got new outgoings and what does

that look like? But it was nice to have that comfort that it wasn't me looking at it in terms of, " Okay, well, if I want to reduce my hours, what does that mean? And can I still afford to contribute my half of things?" Because actually it was recognized that it's just what do we have as a total sum, how much of that is now going towards looking after this little person, whether that's childcare or just new bills

and new groceries that need purchased. But in that way, it was kind of nice. It just became very casual and didn't feel stressful.

Kia Commodore

Well, I think that's nice. Like I said, you got over the harder part initially, which is you tackling that debt, so then everything else almost feels more seamless because money isn't taboo anymore. We can talk about it. We can figure out our rhythm. So, I

think that's great. That's amazing. Amy, it was great hearing how you guys manage your finances as even a couple, and I think it's also good to highlight just in general, anyone who isn't a couple and thinking about different ways that they can manage their finances, keeping separate accounts is another way that you can do it. So, people have their joint accounts, but you might have your separate accounts that

you put money into for different spending. Like you mentioned, sharing things in the joint account is all very useful. Household bills in there, things that you share, joint accounts. Also, dividing up what's mine, what's yours, and what's ours? Keeping that separate and having the main earner pay their partner and allowance. Another interesting way to do it, but

it works for some couples. So, there are some general tips that you can do when it comes to managing your finances as a couple. But what I do want to kind of caveat here is to be wary of joint finances.

If one of you has a poor credit history, because if you open up a joint bank account or take out a mortgage together, your credit rating could be affected as you'll be co- scored if you apply for credit, so it's a good idea for both of you to check your credit before combining your finances. Amy, I'm going to ask you the question that I ask all of

our guests at the end of our episode. What are your three top tips for our listeners to help them get a little bit richer?

Amy James

I think my first is there is no one- size- fits- all. I started by telling you that I think we have hit every single one of the ways of sharing finances through our relationship, so we didn't jump straight into

sharing finances on our third date. We built to that, and that has absolutely served us right, but I've got plenty of friends that also have wonderful marriages and partnerships but don't share their finances and still have those open conversations, which is my second point. I think having open conversations, really transparent ones, both with yourselves but also with friends because I think money is really taboo and it

shouldn't be. Why can't we talk about how much somebody else spends on something? Because actually, it might put in perspective, " You're spending what on those bills? Look at this one. You can save a little bit over here." And actually, that really helps and it helps you as a couple as well. My third, I think it's having a shared goal because that helps that foundation of shared respect for each

other's finances. It's unlikely at any point in time, you're both going to match in your finances. One of you is going to earn a little more. One of you is going to earn a little less. One of you might come into a bit of money. And I think having that respect for the fact that you're both working towards a shared goal at any point in time helps if there

are challenges where somebody's going, " Do you know what? Actually, that budget feels really tight and I don't enjoy it. Now, I am feeling restricted in my spending, and that's encroaching on the life that I want." Actually, having that conversation to say, " All right. Well, that's fine. Let's rein that back a

little bit." So, I think at every point, if you have something that you're working jointly towards, that really helps cement any of the other two points where you're having those conversations and being open and honest with each other.

Kia Commodore

Those are amazing, especially the tip about the shared goal. I love that. I think when it comes to any kind of saving as a couple but even as individuals, having a goal in mind will keep you on track, and it's even better if you have the same vision.

Amy James

Exactly.

Kia Commodore

Thank you so much, Amy. You've shared some incredible gems on this podcast. Next time, I'm learning more about side hustles. A second job can be a great way to bring some extra money in, but do you need to pay tax on that money? What other costs are involved? And will you still get time to actually have a break from work? I'm getting into all of this and more on A Little Bit Richer, but while you wait,

hit follow, leave a review, and tell a mate. These are all the things that help get the pod up the chart and helping other people too. Bye.

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