Combining finances can be a touchy subject for couples, posing many important questions. Is it necessary to combine your accounts? What if one person makes more money than the other? What if you have kids or buy a house? Depending on the circumstances, it may feel easier to manage your money together, but that doesn’t mean the transition will be stress free.
Before you dive right in and combine finances, you’ll want to consider a few issues and have honest conversations about your expectations and goals. Unless you can be open and clear about what you want, you aren’t ready to combine your finances.
Consider Your Money Mannerism
One thing that will likely become obvious even when you first begin dating is how you approach small purchases. These are part of a larger set of money mannerisms, little things you may not even consider. For example, what do you do on dates? Do you consider a fancy coffee shop a big expense or are you more of a French restaurant kind of person? If one of you is into the budget dating options and the other is a big spender, you may have trouble coming to a consensus on bigger financial issues down the line.
It’s important to understand that there’s more than one way to combine finances, and that while most people do so in order to approach things from equal footing, others continue to break down expenses based on income – even though the money is in one account.
Typically the uneven approach happens when couples want to protect their assets, but also want to benefit from factors like better interest rates or credit card offers that neither would qualify for alone. You can have different goals and a joint account, but it’s less convenient. That’s why you have to be clear about your individual intentions from the beginning.
Being able to have an honest conversation about financial goals isn’t the same as being honest about your whole financial history. Before combining accounts, make sure you and your partner can both back up your personal financial narrative with documents such as credit scores and pay stubs. While bad credit history won’t follow you forever if you make it better, you may want to avoid combining accounts with a partner if it will harm your chances of getting a loan or keeping your interest rate.
Look To The Future
Ultimately, combining your accounts should only be done if you’re willing to accept a certain loss of independence. When you’re still uncertain about the future of a relationship, hold off on combining your accounts. This can even mean putting off this step until a few years after you get married, until you plan to buy a house, have kids, or even beyond that.
Some people will never feel comfortable with combining finances and that’s okay. There’s no rule that says you have to and plenty of people are happily married for decades with separate finances. The right answer is the one that’s right for both parties, and the right answer can always change.