Love and money: Committing to combining finances

Deciding whether to combine finances with your partner can be a challenge, but you’ve got options. Consider what works for you.

Gifting the one you love with the keys to your heart—or your house—is a big step. Maybe you just got engaged, are looking forward to a wedding or are moving in together. If you’re heading into full-time #adulting, it’s a good time to figure out how you’ll manage the keys to your finances as a couple.

Why money matters

You and your significant other won’t just be sharing a home, you’ll be living together. In addition to the usual number crunching of roommate life, you’ll be sharing more meals and negotiating household purchases. On top of that, you and your partner may not have the same income, responsibilities or spending habits. And these differences can cause some stress.

A 2016 survey from the American Institute of CPAs® and the Ad Council reported that “88% of adults 25 to 34 who are married or living with a partner [said] that financial decisions are a source of tension in their relationship.” So how do you tackle this tension?

Talk it out

Even if money isn’t a problem for your relationship, the last thing you want is for it to become one. So try being open and honest about finances with your partner.

  • Talk about your spending and saving habits, both as a couple and as individuals. Is one of you running up the monthly takeout bill? Or maybe your sneaker habit is getting in the way of savings bliss?
  • Find out what money means to you and discuss why. Understanding where someone’s financial beliefs stem from can make all the difference in how you work with their beliefs, especially when they’re different from your own.
  • Open up about your financial situation. And be honest. What assets do you have and what debts do you both owe? How much have you saved? And since we’re being honest, how’s your credit? (If you’re not sure, check your TransUnion® credit report  for free with CreditWise from Capital One.)
  • Discuss your financial goals and any plans to achieve them.

All couples approach their finances differently. Some go all in, combining all their finances into joint accounts. Some keep everything separate. Others choose a hybrid of joint and separate finances. The key is to find the sweet spot for the two of you.

Going all in: Combining your finances into joint accounts

Pooling all your resources requires a major level of trust and collaboration, but it might result in deeper understanding and actually bring you two closer together.

When you do combine your money, you may no longer have to determine who covers which expenses or to what extent. You both get a fuller picture of your household finances and access to your collective funds in case of an emergency. Combining your money may also make it easier to work toward your financial goals together, and you can make your money work harder with higher returns on investments and higher spending limits.

However, pooling your resources might also make you feel like you’re giving up some of your autonomy. You may have to be accountable to your partner for your spending, and you may have to agree upon a combined budget and set of guidelines based on both of your priorities and habits.

Thinking this is the route to financial Shangri-La for your relationship? Check out a few more tips as you consider diving into joint accounts.

One love, two accounts: Maintaining separate finances as a couple

There are several reasons you might wish to keep your finances separate. The first being that “if it ain’t broke, don’t fix it.” If keeping separate accounts is working for your relationship and you’re both comfortable with the spending between the two of you, why rock the boat?

In fact, if one of you has a lower credit score or high unpaid debt, keeping things separate might actually be helpful if you have any large purchases in your future. Filing taxes separately in this instance would also likely be beneficial.

Do you have wildly different spending habits, financial goals or incomes? While combining finances might help “balance the playing field,” it can also create a disparity over ownership of the combined accounts.

Combining finances is, of course, something you can do at any time should it become necessary. But until that time, technology has made it easier than ever to keep things separate. There are lots of money-sharing applications that enable you to quickly pay your partner (or friends, for that matter) for your portion of expenses, or have them repay you.

Together but separate: A hybrid of joint and separate accounts

Many couples go for the hybrid option, and there are several ways to approach it.

  • Add your partner as an authorized user on your credit card. This way, you both have access to a line of credit in case of emergency or if one of you is simply out of town or unreachable. Plus, by having two people spending on one card, you can up your rewards! You can compare some card options here.
  • Contribute a certain amount to a joint checking account each month while keeping independent accounts. Not only do you keep the freedom of managing your own money, but things like paying the bills just got a lot simpler. Check out Capital One’s 360 Checking.
  • OR try the opposite. Combine all your finances, but maintain separate spending accounts and deposit separate “allowances” into them each month. This way, you can save up for your own personal goals should you choose to.
  • Go for #RelationshipGoals: If you’re reaching for a goal that really takes two of you or if you just want to create a “nest egg” for a rainy day, consider opening up a joint savings account or a money market account.

Would combining finances with your partner make your relationship stronger? Remember, you have options. And no matter how you choose to navigate finances as a couple, just make sure it’s the right choice for both of you.

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