From “Me” to “We” Part II – 9 Things to Consider When Combining Finances

Whether you’ve always had an open dialogue with your partner about finances or only recently had the money talk, there are a lot of things to consider before combining finances. Below, we’ve outlined nine key points to keep in mind.

1. What Bills Will You Combine or Keep Separate?

If you’re considering moving in together and/or getting married, it’s likely that this list will shift at least slightly. For instance, you won’t need two separate accounts for utilities like cable and Internet for the same household. On the other hand, more complex decisions, such as how to handle your rent or mortgage payment, will depend on your current living arrangements - whether you’re going to or from properties that you rent or own and whether both partners can get approved for a lease or mortgage.

2. How Will You Divide Bills?

You’ll need to decide how to divide the bills that you’ll share. Some couples simply go 50/50, while others base their payment amounts on each partner’s income.

3. How Will You Handle Your Debt?

Debt management is a significant consideration. Some couples want to tackle all their debt together, whether it was something they took on individually or jointly.  A common example of this is student loans. Some couples may decide to work together to pay down this debt as quickly as possible. While other couples prefer to handle their own debts separately, as they view it as a personal responsibility or want the satisfaction of paying off their own debt.

4. What Are Your Goals and Future Plans?

This can range from building an emergency fund to traveling, and from starting a family to continuing your education. Acknowledging what you both want to work toward, together, and independently, will guide how you should be allocating your funds to make those goals plans a reality.

You may both be savers, spenders, or a combination of the two. Knowing this upfront can help you work together to improve any negative habits and find balance if you have different styles.

6. What If…?

Life’s uncertainties - break-ups, divorces, unexpected illnesses, or deaths - can throw a couple’s individual and combined finances into a windstorm if there’s not a preexisting agreement about how these situations will be handled. Since these topics can be touchy and may require tax or legal advice, it’s wise to meet with a professional counselor, legal professional, or tax advisor to help you plan.

7. Who Has the Best Benefits?

If you’re getting married, you may have the option of using each other’s company-provided benefits. like medical, dental, vision, or life insurance. In some instances, you may be able to carry double coverage. Review your employer’s policies and plans to determine what makes the most sense financially.

8. What Else Impacts Your Situation?

Unique circumstances like raising a child, caring for an aging parent or grandparent, or having an income that waxes and wanes with the season will certainly affect your finances. Make sure you’ve considered all these factors when planning your financial future together.

9. So, What Are the Options?

When it comes to combining finances, there are three general approaches. Of course, the specifics will look slightly different depending on your unique situation.

• Combine all finances: Some couples prefer to go all in and combine everything. They’ll close individual checking and savings accounts and open joint ones, agreeing to handle all bills and debts together. This option may require some extra work to shuffle accounts around or add joint owners.

• Keep finances separate: Other couples are happy to leave their finances separate. They may keep accounts in one person’s name and just rely on tools to transfer money back and forth as needed. This option can be risky if a couple takes on debt together, but the loan is only in one person’s name – if the couple separates later, one person may be left without official ownership of the asset or carry all the responsibility.

• Have a mix of shared and separate finances: Many couples don’t fit completely into either of the above categories. While they’re in it together, they may still want some independence when it comes to deciding how to spend and save money. In these cases, having a mix makes the most sense, as long as both partners can agree on the breakdown.

Want more tips on how to combine your finances? Check out From "Me" to "We" Part III of this series or visit our Resource Center to find more money management tips.

Read Part I – Having the Money Talk with Your Partner

Read Part III – How to Start Combining Finances