My partner and I are in the process of combining households, and with that comes a very scary conversation – money. We’re planning a future together, and we both know that money is one of the major reasons couples fight, so we’re trying to figure out the best way to handle money.
There are a lot of different ways to handle money in a relationship. The obvious ones are:
- Combine everything
- Keep separate accounts and split bills
- Combine some things, keep some things separate
There are good and bad sides to each option. Let’s walk through them.
Combining All Finances
Combining all finances is pretty obvious – you put all of your money into joint bank accounts. If you go all the way, you also share credit cards, don’t just pay for those separate cards from the joint accounts. This keeps everything out in the open. Each person knows what the other person is spending, and there are no secrets.
One downside to this is that if you want to buy a gift for the other person, you can’t keep it secret. You’re also at risk if one person starts overspending. In a good solid relationship, that shouldn’t be happening, but it’s something to be aware of.
Keep Separate Accounts and Split Bills
If you choose to keep separate accounts and just split your bills, you each keep control of your own accounts. You can keep some secrets from each other if you want, and you can splurge on things without feeling like you’re taking from the family money. On the downside, if one person makes significantly less money, that person can feel taken advantage of, even if the bills are split by income percentage. Additionally, neither person has full insight into the family finances. Finally, the big downside I see with this one is that you aren’t saving for anything together – you aren’t planning for vacations or a new home. At least, you’re not saving together.
Combine Some Accounts and Keep Some Separate
This is the route my partner and I are taking. We haven’t figured out exactly what that will look like. At the very least, we plan to get a joint checking account linked to both of our bank accounts. I think it will likely make sense to get a joint credit card (or add the other as an authorized user on a card we already have) and then use that card for some bills and joint expenses. We will have to figure out exactly how much we want to each contribute to the joint account – we definitely want to be saving up for the future, but I also want to be sure that we’re both contributing enough to our retirement accounts. I know that I have room to increase that amount.
The Most Important Thing
The most important thing to remember about how you manage your money with your partner is to keep the lines of communication completely open. Talk openly about your finances, talk about your goals, and make sure that you are constantly on the same page. I know a lot of couples do weekly or monthly budget check-ins and I definitely like that idea. But whatever we do, we’ll do it together. ney
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
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