Eight Tips for Couples Combining Finances: Should We or Shouldn't We?

When we’re in love, we typically want to do and share everything with our partner. But is it a smart decision to make? In my work with couples over the years, I’ve seen how financial conflict can destroy even the best relationships. There are better times than others to make this leap with your partner.

Once you have an idea that your relationship is getting serious, that’s the time to begin talking about finances. We date people for a reason — to find out if we’re compatible. Part of being compatible for many people is having similar financial philosophies and goals. Even if you have differences, just knowing and understanding your partner’s financial attitudes and behaviors is essential if you want to have an honest, open relationship.

The four to six-month range is usually a good time to start financial conversations. At this juncture, some of the newness of the relationship has worn off, and if you’ve been together this long, it means you haven’t found any glaring differences that might make you want to stop seeing one another. It’s a propitious time to start talking about how both of you feel about money matters.

Here are some things to consider before combining finances and sharing all expenses:

Wait a year. Wait a minimum of 12 months before you combine any type of finances. For the first 12 months of a relationship, we’re usually on our best behavior. After that, we tend to let our guard down a little. If there are worrisome aspects of your partner’s financial habits, they will probably start to show up after a year.

Make a budget together. Make a budget with your partner that includes everything — utilities, food, insurances (car, home, health, etc.), the expenses that go with raising a family if you plan to have children, pets, a rainy-day fund for emergencies, leisure time, luxuries, etc. Think of everything possible — you really can’t be too prepared or detailed when it comes to budgeting.

Discuss financial goals. Talk about your financial goals, both short term and long term. Short-term goals would be things like paying off your car and student loans, or saving for something you need. Long-term goals would include items such as mortgages and retirement savings. Come to as much agreement as possible now. You can always revise as needed as your relationship continues and your finances change over time.

Figure out spending behaviors. One of the best and most basic decisions to discuss is how the two of you will pay for things. Will you only buy things that you pay for in cash, or will you use loans and/or credit? Is there a certain amount you can each spend without first consulting the other? Once you cosign on any debt or credit together, you are responsible for the repayment of it regardless of what happens to your relationship. Your relationship or marriage may not be forever, but your debt will be — until you pay it off.

Decide if marriage is the right option. In addition to being about love and commitment, marriage is a financial agreement. Marriage may protect your financial interests in the event that your relationship doesn’t work out — a court will help divide your assets. If you’re not married, your partner could theoretically decide to drain your joint accounts.

Compare financial “philosophies.” If you have significant differences in your financial philosophies (e.g., if one of you is a spender, and one of you is a saver), don’t think that your differences will “just work themselves out.” While they may, they most likely won’t unless you can come up with some type of mutually acceptable plan. Don’t be afraid to have the difficult conversations where finances are concerned. It doesn’t mean you love your partner any less; it just means you’re a responsible adult.

Think twice about cosigning. Just because you’re sharing your money doesn’t mean you both have to cosign everything. Think carefully about cosigning on any type of loans, including mortgages and student loans, or getting joint credit cards. Once you sign on for debt together, it doesn’t matter if you are no longer together — you will be held equally responsible to pay that debt back. If you split up and your partner gets angry with you and decides to stick it to you by missing a few payments or skipping out on the debt all together, your credit could take a pretty big hit, and you’ll still have to pay off that debt.

Find your comfort zone. Use good judgment and don’t agree to anything that makes you uncomfortable. We have gut feelings for a reason — listen to them. For example, if your partner says he wants to be able to have some investments or bank accounts that are confidential, ask him why. If you get a queasy feeling that he’s trying to hide something from you, that’s a red flag. Likewise, if your partner makes a demand that feels unfair, speak up. Financial discussions aren’t easy, but getting everything out in the open will make your relationship stronger and more trusting.

Don’t be afraid to have frank conversations about finances. Even though it may be an uncomfortable topic to discuss, it’s a necessary one and it can also help both of you avoid arguments about money in the future.