Merging Finances With Your Spouse Or Partner: What You Must Know

Going from single to in-a-relationship can be an exciting time filled with hope and fun and dreams. But to keep all of that on track, you need to work out a financial situation that both of you can live with. In my own marriage, my wife and I keep separate accounts. Since I make more money, I take on more of the bills, while she handles one or two of our smaller monthly payments and any spending that is completely her responsibility (i.e. the occasional shopping spree, IRA contribution, student loan, car payment, etc).

From time to time, if the topic comes up, family will look at us like we’re crazy for not having one pot where all our money goes to, but what we do, works for us. Still, it’s understandable if you want to merge finances with your partner. Truthfully, as we stay together through the years, we’ll probably do this eventually ourselves. To do it right, there are a few things you must know straightaway.

 

One: Your Budget.

As a couple — and this goes for keeping separate finances as well — there should be no major expenditure in secret. You should know where all your money is coming from, and what all of it is going to. It’s the only way to adequately prepare for retirement, home purchases, the right amount of insurance, etc. Sit down together and be open and honest about the bills that you have and the earnings you make, and do it before ever taking a step toward cohabitation.

 

Two: Set Up Your Joint Bank Account.

How you decide to allocate this, is up to you. If you still aren’t ready to let go of the individual account, then don’t. But do consider making your joint account the first point of reception for all of your income and use it to pay all your joint bills. From there, if there is enough left over, consider setting aside a certain amount each week or month that you can move to your individual account to spend on whatever you’d like (or pay individual bills).

 

Three: Keep Tabs On Credit Reports.

No one wants to live in a dinky little apartment for the rest of their lives. Eventually, you and your spouse or partner will probably want to buy a house or at least upgrade to something that requires a credit check. By staying on top of any discrepancies and ensuring that your credit remains strong, you won’t be caught off-guard when applying for a joint loan. Each of the three major credit agencies will provide one free report per year, and some credit cards and financial apps even allow you to keep up with your credit in real time for a fee.

 

Four: Set Aside For A Rainy Day.

Medical bills, unexpected car maintenance, cutbacks at work — life doesn’t always go the way you would have it to, and it helps to put away money for those rainy days of life. Some have suggested that the funds be enough to pay three to six months worth of expenses, but that isn’t always possible (especially in today’s economy). To start, just try getting to the four-figure mark and grow it from there.

 

In Summary

With all of the tools now available to you via smartphone apps, cloud syncing, and online financial tips, there’s never been a better time to merge finances with a significant other. Don’t let the money conversation go unaddressed. After all, you never know what tomorrow will bring, and you want to make sure that your loved one(s) is taken care of, no matter what. If you’re about to move in with a spouse or partner, we wish you the best of luck as you embark on this new life journey!

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