How to Combine Finances with Your Partner (Without Going Crazy)

by Randle Browning

A couple holding hands outdoors

Eating takeout at a friend’s house, I noticed she sent a Venmo to her partner for her portion of the meal. I was surprised — they shared an apartment and had been together for over six years. I assumed that meant they considered themselves one financial entity, the way my husband and I did. 

But that wasn’t the case. I learned that they split all of their expenses right down the middle, from rent to pizza. Another friend told me that she also split costs, but her partner paid a higher percentage of expenses like rent, proportionate to his higher salary. 

Keeping separate finances in a partnership isn’t unusual, especially for millennial couples. In a 2018 report, Bank of America reported that 28% of millennials kept their finances 100% separate, and one in five didn’t even know how much money their partner made. 

When I thought about it, I saw that my husband and I didn’t pool all of our assets down the middle either. We kept separate investments and retirement accounts, and sometimes used our personal money to pay for big purchases.

I realized something else, too. You don’t have to combine finances with your partner, and, if you do, you should make sure you’re both on the same page.

Does it matter if I combine finances with my partner?

It’s no secret that money is a huge factor in any romantic relationship. According to Business Insider, money is the number one issue that couples argue about. But merging finances doesn’t just affect your partnership — it also affects your financial future in the case that the relationship ends.

Simon Brady, CFP®, CDFA®, points out two scenarios that can play out for married couples. If your marriage ends in divorce, “what assets were brought into the marriage, what were commingled, and what was earned during the marriage will all likely come into play in divorce settlements in most states.” 

A prenup can prevent some surprises there, but merging finances can make divorce bumpier, since “joint accounts are more susceptible to being raided by an unscrupulous partner,” says Brady.

If a marriage ends because of the death of one partner, it works the other way. “It is much easier to simply remove the name of one of the holders of a joint account (a death certificate will usually suffice) than to transfer ownership of an individual account.” This could prolong an already painful process, “which means it can sometimes be many months before the surviving spouse gains access to those funds.” 

There are other factors to consider, as well. Recent data has shown that combining finances can lead to more satisfaction in your relationship. That could be because it fosters a “we” mentality of financial togetherness. 

If you do decide to merge finances, what should you consider first? And how can you avoid some of the biggest mistakes that couples make?

How to successfully combine finances with your partner

1. Discuss financial priorities

When I met with a financial planner for the first time, one of the initial questions she asked me was, “What are you saving for?” I wasn’t sure, until she started listing some of the possibilities. Your financial goals could include:

  • Saving for retirement
  • Saving to cover the cost of a child’s education
  • Saving for a large purchase, like a home or car
  • Having enough to spend on entertainment, food, travel, etc.
  • Spending on philanthropy
  • And more

There is no right or wrong financial goal. The important part is that you and your partner understand each other’s priorities before combining finances. 

2. Disclose your debts

Debt has been associated with divorce, so much so that working on financial goals with your partner could also be a form of working on your relationship.

That said, finding out your partner has debt isn’t necessarily bad news. Some debt is considered “good debt,” if it has a low interest rate and is part of an investment, such as a home mortgage. And having debt can even help your credit score — if you’re able to make payments

That said, any debt that comes as a surprise is likely to be a blow to your relationship. Before merging finances, make sure that you and your partner disclose any:

  • Student loans
  • Car payments
  • Mortgages
  • Credit card debt

Related article: Should I Pay off My Credit Card Debt or Student Loan Debt First?

It could also be a good idea to share your credit scores in advance, especially since both of your credit scores could be factored into future applications for things like joint credit cards. While you’re at it, to tell each other about any other financial obligations, such as leases.

3. Discuss financial “style”

Financial “style” is another concept it’s important to think about before throwing all your eggs in one basket with your partner. Just like with financial goals, no financial style is right or wrong, but it’s important that you understand where you and your partner land on the spectrum of financial personality types

You don’t necessarily have to share a style. A big spender and a more conservative saver can balance each other out, and a budgeter can complement an impulse buyer, but it’s important to know what you’re getting into.

4. Agree on a model

In speaking with friends about combining finances, I realized there are a lot more options than just keeping it all separate or throwing it all in the pot together. 

You could keep everything separate, splitting all expenses right down the middle and paying them separately out of your own accounts.

Or you could do what a friend of mine does with her husband, and pay a chunk of expenses proportionate to your income. In this model, the partner who earns more money pays more of the bills.

You can also do a hybrid method, where some of your finances are separate and some are shared. Maybe one partner uses a specific type of income to pay off a personal debt they came into the relationship with, for example.

5. Think about taxes

Just like with most money decisions, it’s smart to think about the tax implications before diving in. Often, marrying and filing jointly can mean paying less in taxes, but that’s not always the case. 

Regardless of how you file, it’s important to check with a financial advisor about how merging finances could affect your taxes.

6. Talk to an (actual) financial expert

According to Brady, one of the biggest mistakes couples make when combining finances is going to the wrong places for advice. 

While “banks, insurance companies, brokers, unqualified family members, some guy at work who buys stocks and tells you he does well, self-help ‘gurus’, shady online courses, etc.,” can give you advice, it’s best to build “a relationship with a qualified and fiduciary fee-only financial planner who is experienced in working with clients,” — like you and your partner. 

7. Make time to revisit your finances

And remember, deciding whether or not to pool money with your partner should be one of many conversations about finances throughout your relationship. 
The expenses that come with having babies, paying for college, buying a home, retiring, and more, can all change you and your partner’s financial priorities and needs.

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