Let’s face it.
Money matters.
Say what you will, but money is often the crux of all relationships. When money is mismanaged, or it’s flow isn’t transparent, people become emotional. Sometimes, that emotion derives from a rightful place, other times, it’s a result of paranoia.
Some open relationships can present challenges to the financial dynamic. Today, we’ll discuss better ways to traverse financial situations when you’re in an open relationship.
Because as we already mentioned, money matters.
The honeymoon is over. You’re living together. And suddenly you realize that their’s no financial plan. This realization usually occurs when one or all parties feel their paying way too much for too many things.
In the 21st century, relationships have evolved into more complex places. The new, revived emotional experiences are wonderful, but they also offer unique challenges, particularly in the financial realm.
Just because you’re in a blissful open relationship doesn’t mean the financial stress misses you.
Whether it’s planning for the future, managing day-to-day expenses, or addressing the occasional financial hiccup, it’s imperative to approach finances with openness. Yes, pun intended.
Let’s delve into a number of financial matters as they pertain to an open relationship.
Shared Finances
Shared finances are the mainstay dilemma for people who cohabitate in any form. If you’ve ever had a roommate, then you know that one person often feels the brunt of buying groceries. Or at least, they perceive it as such.
An open relationship’s persons are far more attached than mere roommates, there’s elevated romantic inclinations and intimacy. Due to this, there should be considerations:
Joint vs. separate accounts:
You’ll need to decide if you and your partner(s) should have separate or mutual accounts. There are pros and cons to consider for each.
For a joint account:
Transparency is the biggest pro. All parties can see exactly what’s happening. Moreover, your able to streamline any financial or spending goals. For example, your shared expense such as rent, groceries, and utilities are managed from a central spot. You can build a savings together a bit easier, or prep using an emergency fund.
The cons are mainly that joint accounts offer less financial independence and certainly, less privacy. Moreover, a partner may misuse the funds your contributing towards. Trust is a big deal in a joint account.
For separate accounts:
Financial autonomy is the biggest one here. You remain fully in control of your earnings and savings. You have complete privacy along with clear boundaries. However, there’s a lack of transparency and less potential for mutual financial growth.
Co-Habitation
Your living arrangements will matter. If you and your partner(s) decide to embark on co-habitation adventure, you’ll need to consider how those finances will be handled.
Rent or buy?
Do you rent or buy your place? Buying is often a more sound investment, but home ownership creates issues if the open relationship falls apart. Moreover, you will need to map out exactly how utilities and expenses are paid. Any lack of clarity in this area may result in disagreements.
Addressing Earnings Disparities
Whether you’re in an open relationship or not, partners should always consider addressing financial disparities. When one partner earns significantly more than the rest of the partners, jealousy can set in.
The emotional side of this should be addressed. The partner(s) earning the most may feel bitter that they “carry the load” while less earners may feel marginalized. As you can see, partners and what they earn can create internal power struggles which lead to feelings of inadequacy. These issues should be addressed head on and early.
Here’s a couple of tips:
- Collaboratively design a financial plan that acknowledges disparities but works towards shared financial goals.
- Explore tools and resources, like financial advisors or budgeting apps, to navigate disparities efficiently.
As well, considerations should be made for supporting partners through rough patches.
Long-Term Planning
You and your partners should discuss long term financial planning. This such as IRAs, savings accounts, and home ownership should be centerpieces of your plan. Beyond that, it is important that all partners consider a rainy day fund, or emergency savings account.
Conclusion
Open relationships sometimes add an extra complication in the financial relationship due to more partners. Addressing these issues from the outset and having a plan is the most productive way forward. This prevents confusion from happening down the road. Misunderstandings in finances is a big reason why relationships tend to fail. Having a plan helps thwart such confusion.