Combining finances as a couple: pros and cons

Ah, Valentine’s Day.

Red and pink boxes are appearing in storefronts, rom-coms are flooding the box office, and a certain bow-wielding angel seems to be lurking around every corner.

Love is certainly in the air – and it’s times like these that make many couples start to wonder if they are ready to take the next steps in their relationships. From moving in together to getting married to having children to combining finances – these decisions are exciting, but also really big and important, and as such should be considered carefully.

Now, I can’t help you decide whether you are ready to take the next step in your relationship  – that’s a decision that you and your partner will have to make together. But I can help you examine the pros and cons of certain financial options so that you can come to an educated decision together that will be the best decision for your relationship and your finances – both as individuals and as a couple.

Below, we examine the various pros and cons of combining finances with a partner so that you can confidently and securely take the next financial step in your relationship – whatever that may be.

Pro #1: For some couples, combining finances can make managing bills easier.

Many couples choose to combine their finances for the sake of convenience – especially once they are living together and share many joint expenses such as rent or mortgage payments, groceries, utilities, insurance, etc. 

Rather than try to manage shared expenses from multiple bank accounts, some couples find it easier to handle shared expenses from a combined account.

Pro #2: Combining finances can allow you to reach certain financial goals faster.

This one is a no-brainer: combining two incomes can open more financial opportunities and help you reach certain milestones faster. Whether you are trying to reach a savings goal, buy a home, invest in the stock market, or pay off debt, being able to leverage two incomes can speed up the process of reaching your specific financial goals.

Pro #3: Combining finances can create more transparent financial conversations and practices.

It’s no surprise that talking about money can be a little awkward – so much so, that many couples avoid talking about their finances as much as possible. In fact, a 2021 Fidelity survey found that nearly 40% of American adults who were living with their partner were unable to correctly identify their significant other’s yearly income, let alone identify the specifics of their partner’s spending, credit habits, debt balance, etc.

Needless to say, having serious financial conversations can be difficult, but they are extremely important and essential to the health of your relationship. The process of combining finances with your partner can often require you to engage in those high-value, transparent financial conversations and work together to create money practices and habits that align with your shared financial goals.

Con #1: One person’s debt can negatively impact the other

When you combine finances with a partner, you do not become responsible for their debt, nor does their credit score affect your own. But if you combine your finances under the agreement that you will also be sharing all your expenses, your income could be leveraged to pay off the debt of your partner.

Now, this isn’t necessarily a bad idea – this could be a good option for you and your partner as long as it is discussed in detail and agreed upon beforehand. But this can become sticky if your partner is bringing an excessive amount of debt into the relationship – ultimately requiring you to contribute more of your income to their debt payments than you may have been planning on or prepared for.

Con #2: Having combined finances can limit your financial autonomy

While you should be working with your partner to maintain a budget that works for both of you and moves you toward your shared financial goals, you should also have the freedom to make purchases or investments that align with your values without having to run it by your partner.

Plus, how are you going to ever surprise your partner with a gift this Valentine’s Day if they can see every purchase that you make in your joint bank account?

Con #3: Having combined finances can limit one partner’s financial literacy

While we all hope to enter into partnerships that will be lifelong, sometimes things don’t end up that way. 

Too often we see one partner (heterosexual women in particular) enter into a long-term relationship and immediately give their spouse complete control of their joint finances. Due to being so financially “hands-off,” that partner is less likely to have a thorough understanding of their finances and develop the skills and knowledge necessary for a healthy relationship with money.

In the case of a divorce or the death of a spouse, that partner will have an extremely difficult time advocating for themself financially and transitioning to managing their finances.

Con #4: Combining finances can make financial abuse more accessible

I hope that this is not something that you need to seriously consider as you navigate this decision, but I would be doing you and every reader a serious disservice if I did not address this: it is a sad reality that financial abuse occurs in 99% of cases of domestic violence. 

The more access an abuser has to your finances, the more power they have over you, and the more difficult it becomes for you to leave the unhealthy relationship. You should never feel stuck in a relationship because you can’t afford to get out of it. By maintaining your own bank accounts, you will always have access to the financial resources you need to prioritize your safety and well-being.

My recommendation for combining finances

Once again, I want to remind you that I can’t make the perfect financial decision for you and your relationship – that is something that you and your partner need to do together. But my suggestion for couples who are considering combining finances is to maintain separate bank accounts but open a joint account(s) in which both you and your partner contribute.

This account can then be used for shared debts, saving goals, and expenses like rent, utilities, and Ladder life insurance, while you maintain your personal bank accounts for personal financial goals and to maintain financial autonomy.

This money management approach will require intentional effort and communication between you and your partner which is just another reason to be consistent with your monthly money dates! While managing multiple accounts may feel a bit complicated at first, it will ultimately ease many of the financial strains that can come with managing your money as a couple and creating a financial future that you both look forward to.

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