EXPERT ADVICE: Should you ‘hybrid’ your finances?

Why sharing a life with someone doesn't mean you have to share all your funds too.
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We’ve all heard the line: “being part of a couple doesn’t mean you have to share absolutely everything.”

Interestingly enough, this idea is actually one of the fastest-growing financial changes happening between the generations. 

WATCH NOW: How to save more money and spend less. Article continues after video.

Cash control

For the baby boomer and even Gen X generation, the most common financial setup for couples has been to have one joint account with pooled resources for all expenditures. 

However, according to the latest surveys, less than one in two (44 percent) of Australians are happy to share 100 percent of their finances with their significant other. 

Older Aussies have remarkably different banking habits to younger Aussies. (Credit: Supplied)

One in three have some shared finances but maintain a separate bank account with independent funds. While one in five Australians choose to keep their finances totally separate from their partner. 

This last point jumps up to nearly one in two for Aussies 30 and under. 

Some of the feedback people gave for splitting their finances shows how we have changed: “It gives me freedom”, “but I don’t want to burden my family”, “I want to maintain control of my money”, “I worry about what might happen if we split up.”

Clearly, there’s no right or wrong way for couples to manage their money, but one thing I talk about a lot with people is “hybriding” your personal finances.

Having an ‘our’ account is handy for bills and buying shared assets. (Credit: Supplied)

How it works

Have a ‘me’ account where you hold an amount of funds for no-questions-asked personal use. 

So, if you want to buy something new, you can. The idea is that the funds are yours to spend, and you can be secure in the knowledge that doing so won’t affect your partner, family, or overall wealth. 

It’s wise to offer your partner a similar ‘their’ account. This way there is less cause for resentment – something that can easily happen. They can use this money as they choose, just as you can.

Create an ‘our’ account. This is that same pooled account you had before to deal with family expenses, bills, and other costs. The difference is that if one person wants to use funds for their own personal use they now can without guilt or issue because this spending is separated out in their ‘me’ account. 

This is the concept of hybrid finance – it’s not for everyone, but it can take stresses out of the family finances.

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