First comes love, then comes marriage, then comes … combining finances? Well, maybe. Or maybe not — especially if you're worried you might end up regretting it.
In 2019, a majority (78%) of U.S. adults in relationships said they keep and manage joint finances with their partner, according to online insurance marketplace Policygenius. At the same time, one in five people regret combining finances with their spouse or partner, according to a 2019 MagnifyMoney survey, which polled over 1,000 Americans.
Respondents who earn more than their partners more commonly feel remorse over combining finances. To be exact, 29% of breadwinners within a relationship say they wish they had never folded their partner's money into theirs, while just 16% of lower earners said so, followed by 11% of those who make about the same amount.
Money conflicts aren't uncommon within romantic relationships. Nearly four in 10 respondents reported feeling concerned that their partner or spouse spends too much, and women are nearly twice as likely to express that they're not satisfied with the way finances are managed in their relationship, the survey found.
How people feel about combining finances also differs by generation. Of those polled, 27% of participants who fall within Generation X (ages 39 to 54) wish they hadn't combined finances with their spouse or partner, while just 22% of millennials (ages 23 to 38) and 12% of baby boomers (ages 55 to 73) felt that way.
Here are three tips from financial experts that can help you to hopefully avoid ending up like the 20% of Americans who regret mixing money and love.
1. Think "yours, mine and ours"
To maintain transparency within your relationship, while also allowing yourself a bit of healthy financial autonomy and independence, follow a "yours, mine and ours" line of thinking, says Marcy Keckler, certified financial planner and vice president of financial advice strategy at Ameriprise.
"Consider establishing a joint banking account for shared expenses and individual accounts for personal purchases," Keckler suggests. In this case, the joint banking account represents you and your partner's "ours" component, while each of your individual accounts make up the "mine" and "yours."
This strategy is designed to help you decide where you and your partner's money will be kept jointly and at what point, if any, portions of your money will be kept separately. Having individual accounts, as long as you and your partner agree about how they're used, can be a good thing if maintaining some level of financial independence is important to you, Keckler explains.
It's also a good idea to set rules about how these separate accounts are to be used. Couples can set a spending limit, for example, and any purchase over that limit needs to be discussed beforehand, Keckler explains.
2. Discuss finances with your partner
When deciding whether to establish joint finances, experts advise having a serious conversation about money where you put everything on the table. Doing so will help you determine if you and your partner are aligned in your views, practices and financial goals.
"If you're considering combining finances, it's important to set expectations and be honest about your financial priorities and feelings about money," Keckler says. "Be sure you talk about financial roles and goals. What do you want your financial future to look like?"
If talking about money stresses you out, Kristin O'Keeffe Merrick, a financial advisor at O'Keeffe Financial Partners, offers a helpful checklist of questions to keep you on track:
- How much debt do you carry?
- How much money do you have in savings?
- Are you saving for retirement?
- How do you think, feel and act when it comes to money?
- What are your spending habits like? (i.e. Do you tend to overspend or are you more frugal?)
- Do you stress too much about money?
"It is important to be an open book with your partner — especially if you plan on marrying," Merrick says. "Marriage is a legal merger between two people and one must know everything about the other's money — good and bad."
Once you've set a game plan, it's also a smart idea to check in with your partner regularly. Taking the time to sit down with your partner lets you discuss what's working and not working with your financial plan. It also provides an opportunity to respectfully express any frustrations you may have about how money is being handled.
If life circumstances have caused your money goals to change, these check-ins can also act as a place to alter your financial strategy and agree on your next steps as a couple.
How often you choose to check in with each other is highly personal. If you feel your finances need more attention, sit down every few weeks. If things are going well, once a month or every few months should suffice.
3. Share the burden equally
Combining finances with your partner means two things for both of you, says Keckler. First, you each need to play an active role in managing your money. Second, you need to be educated about finances, especially things that pertain to your circumstances.
"Decide how to divvy up tasks, such as paying bills, balancing your accounts, or arranging appointments with your financial professional," Keckler says. "Work together to determine what you want your collective financial future to look like."
That could mean creating a schedule for who handles each task or setting reminders on your respective calendars about due dates on various bills. Start with whichever tactics you think will keep you alert and motivated about tending to your money.
When it comes to staying educated, Keckler says "it's important that both members of a couple have a complete understanding of their overall financial situation." That includes knowing the locations of all your accounts, being familiar with any financial professionals involved, such as an accountant or financial advisor, and having online access to all jointly owned accounts.
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