If you’re in a committed relationship, there comes a time when you start talking about taking your relationship to the next level. Are you considering marriage or moving in together? You should discuss your finances before going any further.
Combining finances with your partner is a big step in a relationship. Whether you merge 100% or agree to leave some things separate, a lot of thought, effort and responsibility goes along with sharing money matters. We’ve broken down three of the most common ways to merge your finances to help you and your partner consider what’s best for you.
1. Equal Footing
Ready to start the process of combining finances but still want to keep some things separate? Try opening up a new joint account that’s designated for bills and other shared expenses. You and your partner will contribute the same amount to this account each month, then keep the rest of your earnings in individual bank accounts to spend how you please.
2. All In
If you’re “all in,” this means you and your partner are choosing to combine finances totally. Many people decide to do this after marriage, but it’s no longer seen as a “requirement” for couples that have tied the knot.
To go this route, open up a joint checking account in which you deposit all your income. This account will pay for all shared expenses. You may also open a joint savings account for any money you decide to set aside together.
Even though most of your assets will go into these combined accounts, you and your partner can still choose to keep individual checking accounts for “fun money.” Plus, a separate checking account can be a good way to keep any gifts a surprise for your loved one.
3. Savvy Savers
The goal of this method is to live off of a single consistent income and put the second income into savings. This is a great way to build savings quickly, whether you’re hoping to establish a rainy day fund or save up for a big purchase.
You and your partner may want to do a trial run of the “savvy saver” method to see if it’s feasible. This is helpful if you’re planning to start a family, go back to school or there’s a potential that you or your partner will be out of work for an extended period of time. It can even just be a good exercise for couples who want to amp up their savings efforts.
No matter what you decide to do with your finances, be sure you and your partner are on the same page and feel good about your arrangement.
