Decide on a plan that works for you, regardless of societal pressures, and use these steps as a starting point for an open and honest financial future.
Merging finances with your partner is a big decision. It’s not only linking income and budgeting but also tying you together in terms of short and long-term financial goals. If you’re looking to manage your finances with your partner, here are four tips to get you started.
- Have transparent communication. Finances are a major point of contention for many couples. Being open and honest can help prevent some disagreements about money down the line. Although it can be uncomfortable, this means laying out all your cards on the table when it comes to income, debt, spending habits, savings goals, and credit scores. It’s also a good idea to set up a regular schedule to look over financial changes and adjust your budget together so you’re always on the same page.
- Actively budget. Create a spreadsheet or use a budgeting service to track exactly how much money is coming in and where it’s going out. This is also a good time to look at where each person’s major expenses go and areas where you can save money by consolidating expenses (like on your phone plan).
- Decide whether to merge or share. Merging finances means consolidating all or most financial assets into combined accounts used for all expenses while sharing means maintaining independent assets and agreeing to split expenses. These two approaches offer a lot of wiggle room for personalizing your combined finance plan. For instance, you can choose to split all expenses based on your share of income or you can create a joint account for all shared expenses like mortgage and food, but have independent accounts for personal purchases.
- Set goals. If you’re combining finances, set specific savings goals together. That could be a downpayment on a house, a dream vacation, or retirement goals. Setting goals will help you visualize your shared financial future.
More and more couples are choosing to maintain their financial independence, even after marriage. Decide on a plan that works for you, regardless of societal pressures, and if you do decide to combine expenses, use these steps as a starting point for an open and honest financial future.