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Merging Money in a Relationship

By: Kenyon Sutton, Financial Wellness Manager

Posted on 6/30/2023 11:41:35 AM

Determining whether to merge accounts and debts is a personal decision that depends on your unique circumstances. There isn't a one-size-fits-all approach when it comes to combining savings, checking accounts, and debts with your spouse. Before making such a decision, it's essential to assess the level of commitment in your relationship and your preferences. We have some great talking points to help navigate the process of combining your finances as a couple, so you can have productive conversations together.

When should you consider merging accounts?

If you haven't been together for long or don't feel a strong sense of commitment yet, it may not be the right time to merge your finances. However, if you've been together for a significant period, are engaged, recently married, or have reached a very stable point in your relationship, it might be worth considering this financial step as you plan for your future together. Think that combining your finances won’t affect your personal relationship? Studies show that couples who combine their money are more likely to stay together. Merging finances can lead to a sense of teamwork and greater relationship satisfaction.

Reaching an agreement on merging finances

If you and your spouse decide that merging finances is the right move, it's crucial to establish a fair agreement where both partners have equal control over the finances. It's important to avoid a situation where one person holds all the power, as such an imbalance can lead to disagreements down the road. Consider various ways to combine your money, such as keeping separate accounts and adding a joint account or opting for a single joint account. The best approach is to have an open discussion as a couple and decide what works best for both of you.

Approaching the money talk

When discussing money, it's helpful to start with simple conversations and focus on a few key topics. Choose a suitable time and place where you can both be present and fully engaged without distractions that may interrupt your important discussion. Set aside dedicated time to have an honest and open conversation about money together. Begin by discussing basic financial questions to understand each other's financial standing to provide insights into whether merging finances is the next logical step for your relationship. Open communication is the key to starting these important conversations.

Navigating the conversation

Income: Talk about your earnings, including salary, bonuses, stock options, and other forms of compensation. If your income fluctuates, make sure your partner understands the nature of your financial situation. Sometimes you might find there is a large income disparity between you, which is important to discuss and plan for as you combine finances.

Assets and Debts: Share your perspectives on debt and discuss your individual assets and debts that you have. Perhaps you want to reevaluate how you deal with your debt or see what position you would be in if you combined your assets. Transparency in this area is vital for a comprehensive understanding of your financial picture as a couple. One person may have inheritance, property, or other investments that they want to keep separate from your joint account. You might have multiple savings accounts or significant retirement funds.  Bring it all to the table and decide what is the right move for both of you.

Financial Priorities and Goals: Use this opportunity to communicate your dreams, aspirations, and financial goals. Whether it's saving for retirement, pursuing further education, starting a business, or planning for future children, express your desires to your partner so you can come up with solutions to make your goals a reality.

Financial Styles: Consider your financial tendencies, whether you're a saver or a spender. Assess whether merging finances with someone who doesn't align with your financial goals and lifestyle would create challenges. If you both share similar financial approaches, it will be easier to plan and agree on financial decisions as a team.

Creating a personalized plan:

If you find that your financial priorities and goals significantly diverge, it may be necessary to reconsider merging your finances. Combining accounts can become contentious if one partner is a big spender while the other is a dedicated saver, or if one partner is debt-free while the other carries significant debt. It's crucial to evaluate the potential impact on your relationship before deciding. This might be time to evaluate your personal finances and rework your budget to adjust for future goals.

If you feel that merging finances isn't the right step for you right now, there's no need to rush. You can take merging finances at your own pace or find alternative arrangements, such as each having individual credit cards for certain expenses and a joint credit card for shared expenses. You can have separate savings accounts and a shared one. Depending on your joint financial goals, consider a joint savings accounts to contribute to purchasing your first home, or a joint vacation fund. Decide what works for you. If you decide to take the next step in your relationship, the conversation about finances and merging accounts can always evolve, depending on what stage of life you are in.

The process of merging finances varies for every couple. It's important not to feel overwhelmed when discussing personal finances and whether merging accounts is the right step for your relationship. Honesty is key in both life and finances, and having open conversations will lead to better understanding and trust when making significant financial decisions together. While starting the conversation may be challenging, it paves the way for more constructive discussions and sets the foundation for a solid financial future as a couple.

If you and your partner have questions about opening a joint account or navigating personal finances, schedule an appointment at a Community First branch near you, or call 904.354.8537. Our team can help find the best financial solutions to suit your needs.

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