Combining your finances? Here’s what you need to know


Love and living together often go hand in hand with the “talk”: merging finances. Merging your finances with your partner is an important transition, but it doesn’t necessarily mean all or nothing. There is no wrong way to personalize your banking and bill paying, as long as it is transparent, fair and sustainable for both of you. So communication is a critical part of money management. In this article, we discuss some financial practices that can help you and your partner better manage money matters. After all, you want the best for both of you!

Separated or together
Financial status, previous obligations and comfort level are all factors that can influence your beliefs about money. For some of us, it’s not uncommon to separate the essentials of finances and have a joint account that everyone can access. If you are in a relationship for a while, it makes more sense to combine your funds. In any case, it’s important to understand how you and your partner view money matters, savings, credit cards and financial goals for the future. Below we look at 3 examples of how you and your partner can decide to combine finances.

Different methods for combining finances
Method 1: Gross Contribution
As the name suggests, the gross contribution method means that each person in the relationship contributes the same gross figure, regardless of how much they earn. The rest of the money stays in separate accounts in most cases. A big advantage of this method is that the higher earner is not penalized for his or her success and the lower income partner does not feel subsidized. On the other hand, this method can feel like a “roommate method”, which is not the most romantic option.


Method 2: 100 percent combination
A totally different method is to combine finances entirely. Couples who adopt this method completely combine their bank accounts and pay all bills from the same fund. In addition, all personal purchases are also made with money from the same account. This method is more about the “us” than the individual and is a great way to balance each other out. Keeping financial records will also be much easier because you are only working from one account. However, there can be an imbalance if agreements are not made in advance. If one of the two tends to be a spender, for example.

Method 3: Proportional
The last method we want to discuss is the proportional method. This means that the finances are combined so that they are proportional to their income. This way, neither partner feels obligated to keep up with or reduce their budget based on the other’s income. It is possible to share all household bills and keep separate money for yourself as an individual.

Be realistic and open
It’s not fun to be faced with surprises, so make sure you have the big picture and a realistic idea of what can happen. We all know that debt is not an easy topic in a relationship, but don’t ignore it. A lot of research has shown that many people don’t share basic financial information with their partner, including debt. Of course, it’s best to talk openly and work together on a resolution plan that you’re both comfortable with.

A realistic picture of what you can and can’t afford can help you gather the right information. Be sure to give an accurate picture of what is coming in and what is going out. This creates a great overview and sets you up for the month ahead. Also take time to discuss investments, as your partner’s future and your own is also a consideration. Talking about investments is often put on the to-do list, and often considered an individual thing, since stocks and bonds are held in different accounts. However, any changes in these accounts can affect both of you. So make sure you have investments for the future together that you have agreed upon.

Be aware that discussions about money and money matters will be present throughout the relationship. One conversation will not be enough. Ongoing conversation and communication about finances allows you to make decisions based on your beliefs, life goals and priorities. Talking about money can be difficult at times, but it is necessary for relationships to work over time.


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