So you and your partner decided it’s time to merge your finances, what’s next? If you read the last Love & Money, you know that a lot goes into the decision process, and actually combining finances is no different. There’s several approaches, so use this helpful guide to make sure you’ve covered your bases!
Let’s Talk About: How To Merge Your Finances
No matter how you split it, trust is key. Both you and your partner will have full access to any shared accounts. You should discuss what the accounts will be used for so there are no misunderstandings. It’s also essential to set a limit on how much is too much to spend without talking to your partner. We’ve broken down a few different ways to merge, as well as a few tips!
Approaches To Merging
- The Fairness Is Key Approach
If you and your partner are in similar financial positions, it may be easiest to split things equally. You can combine all of your accounts or only have one shared account. The most important thing is that you contribute equally.
The simplest way to do this is to start with one shared account for all of your expenses. Each month, you both contribute an equal, agreed upon amount.
- The Sharing Is Caring Approach
If you and your partner are in similar financial positions, it may be easiest to split things equally. You can combine all of your accounts or only have one shared account. The most important thing is that you contribute equally.
The simplest way to do this is to start with one shared account for all of your expenses. Each month, you both contribute an equal, agreed upon amount.
- The Breadwinner Approach
If one partner makes significantly more, or if one has no consistent income, it may be best for one of you to cover everything. This generally includes household necessities and expenses, although it’s up the couple.
This approach is fairly simple, whoever makes the most is responsible for contributing to accounts. It’s important to also discuss the what if’s and make sure that neither of you feel guilty or hold a grudge.
General Tips
No matter which approach you and your partner choose, there’s a few guidelines you should follow. These tips will help ensure everything runs smoothly.
- Discuss eventualities
- Decide which accounts to merge
- Create an emergency fund
- Make a shared budget
- Start saving for retirement
