How to Combine Your Finances as a Couple: Real-Life Advice I Give My Clients

by Sophia Bera on February 8, 2017

If you’ve built up savings and  investments while single, it can be tough to shift your mindset from “me” to “we” when you meet someone you want to be with for the long haul.

I answer a lot of client questions about merging finances and setting joint money goals — while still leaving each half of a couple the space to be their own person.

Odds are you won’t settle down with someone who has the exact same financial values and background as you do. I’ve worked with couples where one person was a spender and the other was a saver, or one grew up in a financially comfortable family while the other’s family struggled to make ends meet. Lots of couples don’t know how to split expenses when one person makes a lot more money than the other one does.

But you can find common ground with the person you love. It takes communication, consideration, and a plan that’s easy for both of you to follow.

Did I mention it takes communication? Don’t be afraid to talk about money! (I’ll give you more tips on how to do this in next week’s post — stay tuned!)

There isn’t a “wrong” way to combine, or not combine, your finances. What matters most is that your system works for both of you, and you’re both open to reevaluating that system as your relationship evolves. There are three ways to handle your money as a couple:

  • Combine everything
  • Combine nothing
  • The hybrid “yours, mine, ours” approach

Since some of these systems involve joint bank accounts and credit, let me walk you through how those work.

Joint Bank Accounts

Combining finances with a partner takes a fair amount of trust because joint accounts don’t offer you protection if the other account holder drains the funds. So before you open the account, have a talk about how you’ll handle separating your money in the event you break up. It’s tough to think about, but it could save you a lot of grief if things don’t work out.

Basically, joint bank accounts allow each account holder access to 100% of the funds at any time. You can’t stipulate, for example, that one holder has access to 60% and the other 40%. And you’d both be liable if one of you overdrafts. Along the same lines, if one of you has unpaid debts, creditors can go after your joint accounts.

If you do split up, quickly work out how much you each should withdraw, transfer that money to your own bank accounts, and close the joint account.

What About Joint Credit Cards?

A lot of couples use joint credit cards for the convenience, but I actually advise against it — for reasons you might not think!

No, it’s not because of your credit score (it’s a myth that you share a credit score after you get married). It’s because I’m a huge fan of rewards credit cards. And if you each have your own line of credit, that’s double the rewards. Use your everyday spending to rack up points and take a dramatically discounted vacation with your partner! (If that’s not romantic, I don’t know what is!)

Good to Know! So, How Should We Handle Our Money?

Each system has its pros and cons. Like I said, none of them are “wrong” — but it’s important to pick the one that’s most “right” for you.

Combining Everything

With this system, you and your partner combine your checking and savings accounts and start to view your total financial picture as joint. All expenses become joint expenses and you also start to view your debt as “joint” even though it might be one partner’s student loans or the other partner’s car loan.

The upside is this system offers ultimate convenience. There’s never a question of who pays for what and all income sources go into a joint checking account. You might have different accounts earmarked toward different goals, but you are both on board to pay down debt and build up savings in a way that’s best for your overall financial situation which can be a really helpful mindset for a marriage.

The downside is when one person wants to do something expensive that doesn’t necessarily benefit the couple — a trip with their friends or a shopping spree, for example. It can sometimes feel like one half of the couple has to subsidize the other half’s expenses. If you and your partner have very different incomes and spending styles, this can lead to resentment if you don’t make compromises.

You’re going to need to communicate a lot if you combine your finances completely. It’s important that no one feels like their spending is constantly being scrutinized.

Keep in mind that your retirement accounts would still stay in your own names (those can’t be joint).

Combining Nothing

This is happening more often as couples partner up later in life. You already have a bunch of accounts established and you’re used to a fair amount of independence. Plus, with apps like Venmo and PayPal, it’s so easy to pay each other back for joint purchases.

The benefit is, as I said, independence. Once the needed bills are paid, you have the freedom to make purchases without having to justify them to your partner. And if one half of the couple has irresponsible money habits or debts, avoiding joint accounts can prevent the other half from dealing with, say, their partner draining the account.

If combining everything offers convenience, doing the opposite offers, well, the opposite. You’ll likely find yourself constantly adding up expenses and transferring each other money. A lot of your money conversations will revolve around who owes whom what.

What you want to avoid is rarely talking about money because your finances are separate. Even if your funds aren’t combined, you’re still making joint life decisions.

My Pick: The “Yours, Mine, Ours” Approach

This system offers the most compromise while providing a way to begin talking about money management when you start splitting expenses.

Open a joint checking account for shared regular expenses, and a joint savings account for shared longer-term goals and emergency savings. Discuss the amounts of money you need to save up in these accounts (and how much to deposit per month to reach that goal). If your salaries are similar, you can deposit matching amounts. If not, agree to deposit a percentage of your respective incomes.

You still maintain your own banking accounts, too! I like that this gives you some autonomy in your relationship. You can pay for your own expenses (like trips without your partner, or the cost of your hobbies), while setting money aside for your joint purchases. Plus, it makes it easy to pay for a surprise gift for your partner!

Communication Is the Key

Whatever system you and your partner use, the most important thing is to have regular talks about money. Financial transparency is a really important part of keeping your relationship healthy.

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