Merging Finances When You Move in With Someone

November 15, 2019

Merging Finances

You share the covers, the household chores, and even the television remote with your significant other. But what about the etiquette on sharing finances?

 Regardless of whether you and your significant other just got married or simply moved in together, it can be difficult to decide what to do with your money… and how to best merge finances. Before you think about adding one another onto the checking accounts, though, there are a few things you should keep in mind.

Questions to Ask Before Merging Finances

Some couples choose to open joint accounts right away, while others may decide to keep their money separate, even long after marriage. Regardless of which direction you and your mate are leaning, though, there are a few questions you’ll want to ask first.

How much do you make?

Get an idea of what you each bring in, whether from salaries, bonuses, side hustles, or passive investments. Talk about income schedules and fluctuations in pay, too, especially if one of you is a small business owner, contractor, or freelance worker.

If there’s a significant delta between incomes, decide whether you’ll each contribute to monthly bills and savings goals equally.

Where do you stand?

Speak candidly about each person’s current financial situation. This means discussing assets such as savings accounts, investment portfolios, property, etc.

More importantly, though, it’s imperative to speak about debt. Talk about credit card balances, student loans, existing mortgages, tax liens, and anything else that might be owed.

What are your goals?

According to a TD Ameritrade study, the majority of women who identify as “spenders” are married to men who are “savers.” While this opposites-attract scenario can absolutely be successful, it’s important to establish common goals and priorities from the offset in order to make it work. 

Discuss your goals regarding savings and future plans. Do you want to buy a home, retire early, or travel the world? Maybe one of you thinks you should be saving 50% of your income, while the other believes putting away 10% each month is sufficient.

What’s your style?

Chances are, you already know if your partner is a super saver or goes shopping as soon as the direct deposit hits. Still, sit down and discuss your money styles candidly.

Talk about your fears, weaknesses, and strengths when it comes to finances. Discuss how you each prefer to manage money, and why. This way, you can develop a system that makes everyone happy.

Merging Money: Your Options

There is no gold standard for combining finances with your partner. In fact, you have endless options to choose from.

You might fully merge your money with joint bank accounts/credit cards and a shared mortgage (or lease). Or perhaps you keep everything separate, choosing instead to transfer funds each month for shared bills or simply split the obligations. Your perfect arrangement might also be somewhere in the middle.

This is especially true for those who have children from previous relationships. That might require a hybrid system which combines the finances related to your household, while separating funds that go toward the kids’ expenses.

It’s important to decide what each of you is comfortable with, and design a system that makes everyone happy. What works for the couple next door might not work for you, and there is no “right” answer here.

Dos and Don’ts

Of course, there are a few things to keep in mind as you navigate the world of merged finances with your partner.

Do go at your own pace. Nothing says you have to combine every facet of your financial lives on day one. It can (and likely should) be a gradual process, to better facilitate the shift.

Don’t think that marriage is the determining factor. There are plenty of married couples with their own bank accounts, and domestic partners who successfully share everything. You need to find the system that works for (and protects) the two of you… regardless of whether or not you’re legally married.

Don’t bend the truth. It might be uncomfortable to talk about that high-interest credit card balance you’ve been working to pay down, or the bankruptcy you filed years back. Lying to your partner isn’t the answer, though. Not only can it have serious financial implications in the future, but you also risk breaking their trust.

Do set rules. Whether you establish a strict budget or lax rules about spending and saving, the important thing is that some agreed rules are set. Make sure you’re both on the same page, and willing to work toward the same goals.

Don’t wait until there’s a problem to talk. Financial pitfalls happen, whether it’s going over-budget, making less money than planned, or watching a small business fail. However, the easiest way to head off a problem and adapt is to talk to your partner… before the problem is too big to manage.

If you see an issue with spending or think that there might be a cash flow problem in the near future, sit down and problem-solve together.

Do revisit the conversation often. Budgets, savings plans, goals -- these aren’t one-and-done conversations. Everyone’s financial situation changes over time, as do our visions for the future.

You should plan to sit down with your partner at least once a quarter for a “state of the union” money talk. That way, you’ll know where you stand, how you’ve done as a couple, and where you should focus your efforts moving forward.

There is no right or wrong way (or time) to combine finances with your significant other. The system that works in your home will likely be as unique as you and your partner. However, as long as everyone is honest and straightforward -- and agrees on the same goals -- it’s sure to be a success.