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Should You Combine Finances with Your Partner?

As if relationships weren’t already challenging enough, mixing in the subject of money only seems to make everything more complicated.

Still, like it or not, couples typically need to talk about financial matters, whether it’s working out how to make ends meet on a monthly basis, agreeing on retirement savings strategies, dealing with debts and big purchases, or any number of other spending-related subjects.

Combining finances can be beneficial, and helps build trust

While it might seem stressful and complicated, the good news is there are benefits to combining financial forces with a partner. By consolidating bills within a single household and adding up your earning power, some couples are able to cut spending, tackle debt faster, and put more money towards their savings. Plus, other mutually beneficial options exist, like having a higher-earning partner contribute to the other’s retirement savings plan.

Beyond the balance sheet, combining finances can also help couples build trust and transparency around money issues. When both partners get to see and understand the same set of figures on their statement, and know what the other is earning and spending, there’s none of the grey area that can cloud financial matters for some couples, sometimes leading to arguments and misunderstandings.

Unfortunately, there’s no one-size-fits-all strategy for combining finances that works well with every single couple. That’s because in every pairing, each partner brings their own unique financial attitudes and experiences to the relationship before coming together to form a new unit that has its own special set of needs. In some cases that might mean a family with regular spending on children and home needs. In another situation, the big issue might be striking the right balance between spending on goods and experiences, and saving for the future.

Whatever your background and situation, however, there are a few common ideas and suggestions that can make the process of combining finances more simple, straightforward, and easier to agree on.

Don’t wait to understand each other, and be willing to compromise

For most of us, our financial habits and preferences are formed by what we experienced as children. Based on our background and upbringing, we may be more inclined to save than spend, or want to shy away from discussions about money altogether.

Couples need to overcome potential financial taboos and have open and serious conversations about understanding each other’s comfort level, knowledge, habits, and motivations when it comes to money. Then they can start sorting out other things, such as how to split bills (equally or proportionally to income), or how much to save for the future.

Finally, remember how helpful compromise can be in smoothing out troubled waters. When it comes to finances, the most appropriate solution is often the one that best suits the needs and comfort levels of both partners.

Build a budget together to understand your costs

Once you know how your partner thinks and feels about money, it’s time to get down to details. Work together to build a budget that accounts for all of your monthly expenses, including housing and utilities costs, other bills such as internet and cell phone service, food and transportation costs, and whatever else is applicable. Add up your total spending and see how much is left over from your combined incomes. If you’ve got extra money to work with, you can decide how much you want to put towards retirement, an emergency fund, or any other long-term savings goals.

A joint credit card can simplify your spending

If you and your partner don’t want to mix and merge your bank accounts, one easy way to streamline spending is by using a shared credit card to pay for all your combined expenses.

It doesn’t matter whether you use it to buy dinner out on a Saturday night or pay for a new washing machine. Either way, a shared credit card gives couples an easy way to see what they’re buying together, and how much it all costs. Consider a rewards card that gives you something back for your spending and fits your lifestyle, such as travel rewards or grocery store rebates.

Consider keeping something for yourself

Sharing money can be great, but everyone likes to have a little something to call their own, too. Some couples choose to divert a small portion of their income, say one or two hundred dollars a month or so, into a personal account to use as they wish. The deduction should be small enough that it doesn’t hurt the couple’s bottom line on a monthly basis, but big enough that it will add up over time to give each partner a small fund to dip into for personal treats, say a new pair of shoes, a day at the spa, or whatever else they might choose.

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