Money Conversations You Need to Have Before Merging Finances

By | February 4, 2014

Money isn’t very romantic. In fact, besides picking up the check after dinner, most couples don’t seriously discuss money until after their finances are merged. However, entering into a marriage or combining bank accounts without discussing money is a rookie move that can ultimately lead to financial ruin, even if the relationship itself is a success. Before taking the plunge and combining bank accounts, make sure you have these money-related conversations:

Money conversations before merging finances

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Divvying Up Funds

When American households were solely single income, the division of labor and money was slightly less extensive. Today, couples need to navigate freelance careers, multiple part-time jobs, working while in school and wildly different incomes. Simply put, personal finance has gotten a lot more complicated and that’s not good news for partners looking to merge finances.

Each couple needs to discuss and agree upon a budget and money distribution system that works for them. While a straight 50/50 split of wages into a joint and personal account works for some, couples where one partner makes significantly more than the other may devise a joint budget where each pays a percentage relative to their income. Couples who are merging all finances may benefit from a small allowance every week for small splurges. Without a plan for combining and dividing income, resentment over spending may build up. To avoid this, discuss with your partner how to best combine finances.

Create a Budget

Even if each partner is keeping the bulk of their money, joint accounts can become contentious when both people aren’t on the same page about joint expenses. For those fully merging finances, discussing appropriate spending is important to prevent overdrawing accounts and achieving long term goals. You’ll either need to create a budget or use a tool like Mint or You Need a Budget to come up with an ideal month of expenditures so both partners are on the same page about expenses. Talk about how the specific bills will be paid, which account the money will come from and when they’ll be paid. A detailed look at each person’s financial obligations is imperative to having a useful budget.

Enact a Spending Limit

If one partner is a spendthrift while the other is more frugal, having a spending limit can help defuse money-related arguments before they even happen. Set a dollar amount that each partner can spend without permission and then create an agreement where any amount over that limit has to be discussed prior to purchase. A simple check-in process often prevents frivolous spending and encourages communication about expenses and debt.

Compare Credit Scores

What’s less sexy than talking budgets? Credit scores. Those pesky rating systems banks use to determine everything from car loans to housing rentals are important in long term relationships, though. Whether you want to buy a new home or renovate a kitchen, a bad credit score can significantly impact future plans. For this reason, it’s best to enter into a financial merge with open eyes.

Before merging finances, each partner should get an up-to-date credit report and score, available for free through the government-sponsored, and discuss their results. Not only is this a great time to review any past due accounts and look for credit card fraud, but it’s also an opportunity to look at your partner’s financial history.

Discuss Long Term Goals

While talks of co-habitation include discussions of children, travel and retirement, finances are often noticeably absent. Money plays a pivotal part in any future plans, though, and being on the same page as your partner is imperative for happiness down the road. Take the time to write down your expectations for the next five, 10 and even 20 years and sit down with your partner to discuss these goals. If one partner wants financial independence in the next 15 years while the other doesn’t plan on retirement until 65 or later, talk about how each person can achieve their goals and whether they want to merge goals.

Money is one of the biggest factors contributing to divorce. Much of the stress and many of the arguments caused by merging bank accounts can be prevented by just a slight amount of preparation. By having these essential money discussions you can ensure that you and your loved one are on the same page when it comes to joint finances.

Ken Myers is a father, husband, and entrepreneur. He has combined his passion for helping families find in-home care with his experience to build a business. Learn more about him by visiting @KenneyMyers on Twitter.


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  1. Pingback: Weekend reading: RRSP primer, Canadian dividend aristocrats, and more | AAFS Insurance

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