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  • Writer's pictureZachP

#59. Love & Money: Combining Finances Is A Tricky Game


Combining finances as a couple is tricky. However, properly navigating this financial partnership is crucial for building trust, fostering open communication, and working towards common goals.


Every couple is unique, and there is no one-size-fits-all approach to combining finances. Some couples may choose to maintain separate accounts while others might opt for a joint account or a combination of both.


My wife and I have actually tried both approaches. We moved in together in the summer of 2015. From 2015 until we got married on July 6, 2019, we maintained separate accounts although we lived together and shared expenses.


And now, since 2019, we have maintained joint accounts. We were able to make both methods work for us.


Regardless of the financial arrangement you choose, open and honest communication is key to maintaining a healthy financial partnership.


No matter what you choose, it is important to know each other's financial goals, create some sort of budget, be open about debts, update beneficiaries, explore different options for combining finances, and maintain healthy communication.


Know Each Other's Financial Goals


Understanding your partner's financial goals is crucial for creating a shared vision of your future together. You may not agree on some things, but I bet you both share similar long-term goals.


My wife and I had disagreements upfront when we opened our joint checking/savings account regarding how much money we wanted to keep in cash. I liked a more aggressive approach of only keeping 3 months of living expenses in cash, and she felt stressed out having so little in cash for emergencies.


However, since we both had the same long-term goal of wanting to cover any emergency without having to pull money from our retirement accounts, we were able to reach a compromise. To this day, this is no longer an issue of contention for us.


Start by having an open conversation about individual and joint goals, such as buying a home, starting a family, or planning for retirement. Listen to your partner's goals and concerns, and be prepared to compromise if your goals differ.


Establishing a shared set of priorities will help you work together towards a secure financial future.


Consider Creating A Budget


A budget is essential for managing your combined finances effectively. To create a budget together, start by listing your individual and joint expenses, such as rent, utilities, groceries, and debt payments. Then, decide how much each of you will contribute towards these expenses, keeping in mind your respective incomes and financial goals.


Regularly review your budget and make adjustments as needed, ensuring that you stay on track with your shared financial objectives.


If you need help with budgeting, I have a previous article explaining how to budget and another article with three simpler approaches.


Be Open About Debts


Honesty is the best policy when it comes to discussing debts. Be transparent about any outstanding debts, such as student loans or credit card balances, as these can significantly impact your joint financial plans.


Consider working together to develop a debt repayment strategy that suits both of your needs, and be prepared to support each other as you work towards becoming debt-free.


If you have debt in your life, it becomes even more important to create a financial plan that both partners can stick to.


If you are in debt and need some help, the Debt Free Guys is a great place to start. David and John are awesome!


The Price of Avocado Toast podcast is also another great place to start. Their story is fascinating. They inherited $600k, managed to spend it all and go into debt on top of that, then managed to take control of their finances and are now thriving.


Update Beneficiaries


This is an easy one to forget. Updating beneficiaries on your financial accounts, such as term life insurance policies and retirement accounts, is an essential step in solidifying your financial partnership.


Take the time to review your existing beneficiaries and make any necessary updates, ensuring that your partner is included in your financial plans. Consider factors such as your relationship status, children, and other dependents when making these updates.


If you and your partner rely on each other's income, you can not skip this step.


Unfortunately, There Is Not A Single Way That Works For Everyone


As I said above, every couple is unique, and there is no one-size-fits-all approach to combining finances.


One option is to maintain separate accounts, where each partner keeps their own individual account and contributes to shared expenses such as rent, utilities, and groceries. This approach can work well for couples who prefer to maintain some financial independence while still sharing some expenses.


However, it requires clear communication and transparency about expenses to avoid misunderstandings and resentment.


Another option is to open a joint account, where both partners have access to the same account and contribute to shared expenses. This approach can work well for couples who want to fully combine their finances and have a clear understanding of their shared financial goals.


Again, this approach requires trust and communication to avoid conflicts and misunderstandings. Couples should also discuss how they will manage personal expenses and how much each partner will contribute to the joint account.


Finally, some couples opt for a hybrid approach, where they maintain separate accounts for personal expenses but also open a joint account for shared expenses.


Discuss various options with your partner and consider factors such as your individual financial habits, trust levels, and personal preferences when deciding on the best approach for your relationship.


No Matter What You Choose - Communicate


These are very tough conversations to have at times. Regardless of the financial arrangement you choose, open and honest communication is key to maintaining a healthy financial partnership.


Regularly discuss your financial situation, goals, and any concerns you may have. Ensure that both partners feel comfortable voicing their opinions and be prepared to listen, compromise, and adapt as your financial needs evolve over time.


One key tip is to never talk down to your partner. If they have a different opinion on a financial matter, do not demean them. Listen, try to understand where they are coming from, and aim to reach some sort of middle ground.


Final Thoughts


Combining finances as a couple requires understanding each other's financial goals, creating a budget, being open about debts, updating beneficiaries, exploring different options, and maintaining open communication.


By taking the time to have these conversations and work together, you can build a strong financial foundation for your future.


If you are living with your partner and have not had these conversations, take the first step by setting a goal to discuss your financial goals with your partner or creating a budget together. Heck, even share this article with them, so you can both read it and come to the table with a similar game plan in mind.



Please share your thoughts and any tips in the comments below. Let us be a community that helps each other grow. And if you enjoyed this article, don't forget to hit the heart icon, share, and subscribe for more content.

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