Financial conflicts among couples: Balance joint and solo accounts

Regular money talks, setting up joint goals, and regular reviews can help couples stay aligned

Mumbai-based professionals Adity and Manu Goel (names changed on request) have been married for three years. Lately, differences have begun cropping up between them on financial matters. Adity regards Manu as a careless spendthrift. Manu, in turn, regards Adity as a miser who has no regard for the fact that certain standards must be maintained for appearances’ sake. Here is advice from financial experts that can help couples like them resolve their conflicts, starting this Valentine’s Day.

 

Different attitudes trigger acrimony

 

Experts say financial acrimony develops among couples because they have different attitudes towards spending, saving, and financial decision-making.

 

Vijay Kuppa, chief executive officer (CEO), InCred Money, says couples often clash because they operate with different “money scripts”.

 

Mohit Bagdi, head of investment research and founding member, Mira Money, concurs. “Couples clash when they come from different financial cultures, such as savings-first versus consumption-driven upbringings,” he says.

 

Spending is one major cause of conflict. One partner may spend spontaneously, while the other may be more cautious. “One may prioritise present comfort and social lifestyle while the other may give higher weight to future security,” says Harsh Vira, chief financial planner and founder, FinPro Wealth.

 

Income mismatch can at times create a power imbalance that fuels conflict. Lack of clarity on financial roles, including who manages expenses, discretionary spending, and obligations, can also create resentment. “If one partner controls all the accounts or makes all the decisions, resentment builds up,” says Kuppa.

 

Conflicts also arise because couples do not share financial information, such as income and expenses, transparently with each other. “Secret investments, undisclosed guarantees (say, for other people’s loans), or tax issues erode trust,” says Kuppa. Vira adds that undisclosed loans or credit-card dues often create friction. Family responsibilities and support to parents can cause stress if both parties have not consented to it.

 

Differences in risk appetite while investing can also cause repeated disagreements.

 

Lack of joint financial goals tends to widen emotional gaps. When finances are handled individually without alignment, small decisions turn into trust and control issues. “Without an agreed process for decisions, every large purchase, borrowing decision, or investment choice leads to a fresh debate,” says Kuppa.

 

Myriad grounds for conflict

 

Despite being compatible in other areas, couples can vary dramatically in their attitudes towards various aspects of personal finance.

 

One partner may regard debt as normal for lifestyle spending, while the other may see non-productive debt as financially dangerous. “One may view debt as a cause for worry while the other may see it as a way to accelerate milestones like buying a home,” says Bagdi.

 

When it comes to investing, one partner may want higher exposure to equities and other risky assets because they have a higher risk tolerance, while the other may be much more risk-averse.

 

“One partner may view insurance as a source of protection while the other may regard the premiums as an unnecessary cost,” says Bagdi.

 

Joint, separate, or hybrid finances

 

A hybrid model works best, especially early in marriage. “A hybrid model often balances shared goals and expenses while preserving individual autonomy better than fully merged or fully separate models,” says Abhishek Kumar, Sebi-registered investment adviser and founder, SahajMoney.com.

 

Couples should set up joint accounts to fund shared goals and essential expenses such as rent and groceries. “Major long-term goals like retirement or a down payment for a home can also be funded out of joint accounts,” says Kumar.

 

“Instead of equal amounts, partners may contribute a fixed percentage of their income to the joint framework,” says Hrishikesh Palve, director, Anand Rathi Wealth. Vira adds that such proportional contribution creates fairness and dignity.

 

Couples should also maintain personal accounts to preserve individual autonomy. “Separate personal accounts for discretionary spending reduce friction over day-to-day decisions,” says Palve. Kumar adds that setting up a no-questions-asked spending threshold for small individual purchases helps build trust.

 

Near retirement, couples should fully disclose accounts, investments, insurance, liabilities, and nominations and create a consolidated inventory. “They should then develop a coordinated joint retirement income strategy,” says Palve.

 

How to avoid acrimony

 

As in other areas of a relationship, communication is key to avoiding conflicts, even in financial matters. “Couples should talk about money often and not only when something goes wrong,” says Bagdi.

 

Ideally, they should build a joint financial framework and avoid isolated decision-making. Together, they should develop clear financial goals for the short, medium, and long term and work towards them.

 

Each month, the couple should discuss their budget and set limits for discretionary spending. Large, upcoming expenses should be discussed to avoid surprises. Quarterly reviews of investments and goals can keep both partners aligned.

 

A joint emergency fund of at least six months of expenses and insurance should be treated as non-negotiable essentials.

 

Both partners should share financial data transparently. They should also develop a framework for taking major financial decisions and clarify which decisions are individual, joint, or require advisory input. For high-stakes decisions, couples should involve a neutral adviser.

 

If conflicts have begun

 

Couples should stop blaming each other and agree to stabilise their finances together. Resolution can begin with full disclosure of all accounts. “Disclosing income, liabilities, investments, and insurance policies reduces secrecy and resets the foundation,” says Palve.

 

If uncontrolled spending is causing the conflict, couples should set up a short-term budget that categorises expenses into essentials, commitments, and discretionary spending, and then adhere to it. “Regular monthly financial reviews can institutionalise discipline and help prevent recurring conflicts,” says Palve.

 

If debt has triggered conflicts, couples should first stabilise their finances. “They should then create a structured debt repayment plan,” says Kumar.

 

If discussions repeatedly devolve into hostility, a neutral mediator, such as a registered financial planner, should be engaged to facilitate communication and develop a common plan.

 

As a matter of precaution, lawyers suggest drawing up a postnuptial agreement. “It should outline asset division, debt responsibilities, and maintenance terms, and should be notarised with witnesses for evidentiary value in courts,” says Alay Razvi, managing partner, Accord Juris. He adds that while prenups or postnups are not fully binding, they can guide fair divisions if they are voluntary and disclosed.

 

Approach family courts for mediation

 

• Family courts handle matrimonial disputes, including financial conflicts, through mediation, counselling, and settlement efforts before divorce proceedings.
• They promote amicable outcomes, reducing costs and trauma.
• Safeguard weaker parties by scrutinising affidavits and evidence.
• Through mediation, negotiate for lump-sum settlements protecting the interests of both parties.

 

Source: Accord Juris

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  The writer is a Mumbai-based independent journalist