Maintaining a healthy relationship with your partner(s) can be tough – finances add an increased level of complexity. There is no set formula for how you should combine your finances with your partner(s). However, the structure below can help guide conversation with you and your partner(s).
Gather Financial Details
Before you can decide how to combine your finances with your partners’, you’ll each need to know where your finances stand. If you’ve linked your accounts on a personal finance app, like Mint, then you can start by checking there. But if not, you’ll need to check with each individual institution where you have an account to see where it stands. Some places to check include:
- Checking and savings accounts (likely your bank or potentially other online financial institutions)
- Retirement accounts
- Student loan accounts
- Other debts, including credit cards, personal loans, car loans, etc.
- Total yearly income (this could include pay from your regular job, as well as any side jobs you have)
Establish Shared Priorities
Settle on a time to talk
It’s important to take the task of combining your finances with someone else seriously, so find some time that works best for you and your partner. Try to allow for at least an hour of uninterrupted time — you may need more, and it’s okay to follow up at a later point. During this time, merge your values and desires with your partner(s) to create a list of joint priorities. Try to avoid conducting this conversation during a particularly stressful time, like right after you both get home from a 10-hour workday.
Keep an open mind
Once you sit down to talk, remember to keep an open mind. Use combining your finances as a time to talk about future goals — both financial and work- and life-related — as well as to discuss overarching views on money. This will help you determine the best method to combine your finances in a way that works for both of you.
Decide a Strategy
As mentioned earlier, there is no one way to combine finances with a partner – different couples must try different methods to find what works best for them. Some common ways that people tend to combine their finances that you might want to consider include:
Combine everything and split evenly
Arguably the easiest way to divide and conquer finances as a couple is to throw everything — both your debts and income — into one bucket and just split everything down the middle.
For couples who make about the same amount of money and who have relatively the same amount of debts, this could make a lot of sense, and it’s definitely easier to track.
Combine only certain things
Some couples opt to combine only specific parts of their finances while keeping other things separate.
For example, for student loans that take a large chunk of your monthly income, you and your partner may opt to continue having you pay off that debt on your own, while you combine other joint expenses, like housing, food, entertainment, and transportation needs.
Live off of one paycheck
If it’s possible, some couples opt to have one person pay off the joint monthly expenses while the other puts the entirety of their income towards mutual goals, like savings or paying off debts, etc.
This is a good method if one person makes much more money than the other, or if one person has an income that is less reliable. It’s also a good way to ensure you are always tending to your savings needs.
Combine nothing
It’s entirely possible that after going over your finances, it makes the most sense to keep everything separate, and that’s okay. Especially if you’re worried about what the future might hold, you may want to keep your finances separate to avoid any potential financial problems down the road, at least for the time being.
You of course don’t need to cover everything in one sitting — if there are many considerations, you could set a goal to discuss one financial area, like debts or goals, at a time.
Take Action
- Decide which accounts you’ll be combining
- Create a debt repayment plan
- Establish a budget
- Start an emergency fund
- Save for Retirement
- Discuss long-term savings
- Consider buying life insurance
Check in Periodically
As with most things regarding finances, just because you’ve settled on one method of combining your finances doesn’t mean that same method will work for you down the road. It’s a good idea to set monthly check-ins, especially during the first few months of your setup, to see how you both are doing and to make any necessary adjustments.
Upcoming Event: Love & Money
Are you beginning to think about what it looks like to combine your finances with your partner? There are several things to consider: goals, debt, financial accounts, attitudes, and expectations. Attend our Love and Money workshop TODAY to learn about these topics and learn some strategies that will help you merge your money and financial lives together.
Megan McCoy, assistant professor of personal financial planning, and myself will provide helpful resources and tools. Attendees must RSVP. Faculty, staff, and student couples are welcome. Free refreshments and date night prizes drawings for attendees.
RJ Salmen
Peer Counselor III
Powercat Financial
www.k-state.edu/PowercatFinancial
