What does it mean to combine finances with your partner? How do you go about combining finances after marriage?
Combining finances won’t look the same for every couple. For some couples, combining finances may mean merging bank accounts, sharing credit cards, and co-signing on loans.
For others, it may mean keeping your finances mostly separate but sharing one or two bank accounts.
You’re free to handle your finances in whatever way works best for you, your lifestyle, and your relationship. The important thing is that the two of you support each other in achieving financial success.
Today, I’m going to talk about what it means to combine finances with your partner and how to combine finances with a partner in 7 steps.
How to combine finances with a partner
1) Talk about your family financial history
Both of you are coming from different backgrounds and have different approaches to money. It’s important to talk about your individual money relationships so you can figure out how to handle finances as a team.
Personally, I came from a family that didn’t know much about money. My parents didn’t know much about good money management, so they didn’t set a good example for me. My husband, on the other hand, comes from a family of financial advisors, so he had a much healthier relationship with money.
2) Discuss financial goals
Being able to dream together and support each other is one of the best parts of having a partner. The two of you need to be on the same page financially.
Do you want to buy a house in the next few years? Do you have debt you want to pay down? Do you want to be able to travel together? Does one of you want to be able to quit your job and start a business?
Decide what financial goals the two of you want to pursue – either individually or together – and start working toward them.
3) Decide how you want to combine your finances
This is one of the fundamental decisions you’ll have to make as a couple. You or your significant other may be bringing in substantial assets, debt, or income into the relationship…which you may or may not want to share.
There are a few options for how you decide to navigate combining finances in your partnership.
- Fully combined finances: what’s mine is yours and what is yours is mine (shared debt, investments and spending)
- Partially combined finances: you may have a joint account that you both people can contribute and withdraw from for shared expenses and you may still have separate accounts and individual spending
- Individual finances: you may choose to keep majority or all of your spending independent from your partner and divide expenses or pay each other back for your portion of an expense
There is no right or wrong way to do this - all couples are different. In fact my co-founder of Dow Janes and I each do this differently. My husband and I have fully combined finances and her and her partner have partially combined finances.
Whether you decide to fully combine or partially combine you will likely want to open a joint account to facilitate this.
4) Determine who pays for what
If you are keeping your finances somewhat separate, then decide what you’ll pay for jointly and what you’ll pay for separately.
For example, maybe you split the groceries and mortgage but each of you is responsible for your own car payment. Or if you want to renovate the house, how will you divide the cost?
If you’re fully combining your finances, you don’t need to determine who pays for what, but it can help to set some rules for spending. For example, it can really help to set a dollar amount over which you and your partner will discuss the expense first.
In my family, it is $500. If there is anything either of us is going to buy that is over $500, we have a rule that we discuss it with each other first. We didn’t always have this rule in place and it led to misunderstandings and resentment. Since establishing the rule navigating spending together has actually become much easier because there is more communication.
5) Set a budget
For any of your shared expenses, agree what percentages of your income goes toward what.
As a general rule, I recommend the 50/30/20 budget.
6) Split financial responsibilities
Determine who will be responsible for different financial tasks like setting and managing the budget, paying bills, filing taxes, and making and managing investments.
Which tasks are shared, handled individually or handled by one person for the benefit of both of you?
7) Create a weekly money ritual date
Communication and transparency are key in a relationship…especially when it comes to finances. Understand where your joint money is going and keep each other on track to meet your financial goals. Make this fun, make it romantic, keep it light-hearted so that you want to keep doing it.
How to create a weekly money ritual you love!
There’s no one-size-fits-all answer to how you should manage your finances as a couple, but I hope that this helps you get on the same page with your partner financially so you can both enjoy a lifetime of success.
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