How to Merge Finances

Interracial, queer couple signing a contract.
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Image by Weekend Images Inc. // The Balance 2020

Merging finances is a stepping stone for any relationship. As long as it’s done properly, it can benefit both you and your partner. If you’ve always kept your money separate or are unsure of how to combine it, don’t worry. We’ve compiled this handy guide on how to successfully merge finances with your special someone

Money and Relationship Satisfaction

Research has found that there is a strong connection between responsible financial behavior and relationship quality. One study discovered that couples who underwent greater economic distress were more likely to consider divorce over a 5-year period.

Meanwhile, couples who shared financial assets such as mortgages were more likely to get married and succeed in their relationships. This may be because buying a home together often requires both individuals to save for a down payment, earn steady income to cover a mortgage, and work together to become a stable, financially secure couple. 

Benefits of Merging Finances Early in a Relationship

Merging finances may not be something you think about early on in a relationship. Doing it, however, can be very beneficial as combining money can often lead to transparency and teamwork, relationship success, and a strong practice in fairness.

Fosters Transparency and Teamwork

When you merge your finances, there is full disclosure transparency and teamwork. “You don't have one partner spending all their money and the other saving all of their money for a future house, vacations, etc.,” Pamela Rodriguez, CFP and founder of Fulfilled Finances explained to The Balance via email. It can help you gain clarity and awareness of one another’s spending, saving, investing, and charitable goals. 

Increases the Chances of Relationship Success 

Compatibility is an important ingredient in a successful relationship. “However, the taboos and privacy that exist in our culture around money and personal finance often prevent couples from opening up about finances with each other,” Elliot Pepper, CPA, CFP, and Co-Founder of Northbrook Financial told The Balance via email. This could impact your compatibility and the future of the relationship. Talking about money and combining finances can increase the chances of its success. 

For example, if you find out that your partner carries a lot of debt or engages in impulse spending on a regular basis, you can work to help them put these bad habits to an end. Ultimately, this may prevent discord down the road.

Promotes Fairness

When finances are merged, it’s a lot easier to make sure each person is paying their portion and not getting a free ride. By paying for each other's meals, sharing bills, and splitting vacation costs, you create an environment that shows effort and fairness.

"If there is a drastic difference in the amount of money you both make, you could pay for bills based on a percentage of income,” wrote Thatcher Taylor, CFP at Taylor Financial LLC in an email.

How to Merge Finances 

If you’d like to merge finances with your partner, here are some tips to help you out.

Be Open and Honest

It’s important to be open and honest with your significant other. Are you a saver? Are you a spender? “You should also talk about what money means to you,” Betty Wang, CFP at BW Financial Planning told The Balance via email. Does it mean security? Freedom? Status? These types of conversations will help guide your discussions on your joint financial goals and priorities. 

Listen to one another without judgment. Remember that we all come from different backgrounds and financial situations, so you may not agree on everything.

Create a Joint Account

Once you’ve developed a healthy and transparent relationship around money, you can open a joint account for essential expenses like mortgage and utilities. “Both partners should have a voice in terms of how much money goes into the joint account and an agreement on what is essential vs. discretionary spending,” Sarah Hamilton, CFP and Wealth Advisor explained to The Balance via email.

Start Slow

“You don’t have to merge all your finances at once. It can be a gradual process, just like dating,” Ryan Phillips, CFP at GuidePoint Financial Planning told The Balance via email. You can start with one thing and move to the next. 

For example, you may want to open a joint credit card and use it for joint expenses like takeout or groceries. This will save you time in trying to track expenses and make splitting costs less awkward. If your first “financial merge” works well, you can progress and combine other financial assets too.

Focus on the Future

Rather than dwelling on past financial behaviors, sit down with your partner and think about your future. How do you envision your lives together? How can you best combine and use your resources to accomplish your goals and visions?

“By focusing on the future, you can steer your finances and relationship to a very healthy place,” Kerry O’Brien, CFP of BeingFitFinancial explained to The Balance via email.

Merging Finances Is an Important Step

While combining finances with someone may be nerve-wracking at first, it can benefit your relationship and make you stronger as a couple. Just make sure you’re both on the same page and willing to work together to build a secure financial future.

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