If you and your significant other are stepping deeper into a relationship and are considering combining your finances, here are the things you should talk over to be sure you’re both on the same page.
As your relationship becomes serious, talking about money and combining finances with your significant other becomes very important.
A joint account is a shared responsibility, and—if something doesn’t work out—possibly one with lasting repercussions, so make sure you and your partner have a deep conversation about your finances before taking that step.
Here are things to consider:
1. Discuss the financial situation
As relationships develop, it’s important to be realistic about both partners’ finances in order to establish equal footing. You should share your credit scores, and understand if either of you has debt that would be taken on by the other upon combining your finances. Discuss each other’s attitudes and willpower when it comes to spending—and saving. It is important to be sure you will understand and respect the decisions your partner may take in the future.
2. Will you have joint and separate accounts?
Many couples choose to have shared accounts while maintaining individual ones. If you decide to open a joint account, think about whether you want to open just a checking account, or if a shared savings account meets your goals too.
With multiple accounts of any combination, it’s good to break down how each will be used.
Will there be other joint expenses, like vacations? Will you fund your retirement with a joint account? It’s best to get these questions answered before you combine finances to avoid confusion or disagreement down the road.
3. Who will manage the joint account and what will the “rules be?”
If you choose to combine your finances and open a joint account, it’s important to discuss how it’s managed and by whom. Establishing each person’s responsibilities with your joint account can go a long way towards avoiding future conflict.
If you notice your joint account is trending low on funds, sit down and go over your joint budget. See if there are areas that can be adjusted. It might mean economizing where possible or increasing the amount going into the shared account. Talking through the situation will help you come out ahead each month.
Combining finances with your partner is a big step in any relationship. If you do decide to open a joint account, being able to communicate will allow you to pick an account that will help meet your shared goals, and will avoid trouble down the line.