You just got married or have been dating for a while now, how do you manage your rent payments and day-to-day expenses? Is it now or never a right time to combine your finances?
We’ve all used long Excel files and iPhone apps to reconcile all monthly expenses, summing up to a who-paid-what sort of bill. You may find this somehow painful and time-consuming. But what are the alternatives, are you ready to jump in and start sharing your finances?
We’ve been asked by many of you if they should or not combine their finances. We have tried to summarize the pros and cons.
Combine part of your finances
💳 Open a new bank account under both your names and transfer a predetermined amount of money each month. The amount of money you transfer could be equal for both of you, or according to salaries. The rest is kept in personal accounts.
👌Combining some finances is a good way to help you track your expenses and keep on budget. As you will need a new separate bank account to do this, it is a way to stash the money needed for rent and bills at the beginning of the month. You have a better idea of where is your money going and if you keep on budget as the expenses don’t get mixed with your personal expenses.
👀 But bear in mind that you both have full access of the account and that the money can be withdrawn by any of you at any time!
Combine everything
💳 Combine all your money together that involves sharing saving, current and brokerage accounts.
👀 Combining all your finances is a big step. You should make sure you discuss it in details and know exactly what you are doing and why you are doing it. It can be for commitment, convenience or support. You need to agree with each other and set-up some rules on what you can or can’t do. Also, do you or your partner have some debt? Are you ready to share these debt?
Make sure you are protective of your income and net worth. Sadly, many couples have to separate at some point or even divorce and this can become a very tricky situation to manage.
Keep it separate
💳 💳 Each has his/her own accounts (saving, current, brokerage).
👍 If you are not sure about combining your money or that it sounds a bit too much for you at this stage of your relationship well this is your best option. Money is very personal and you need to trust your partner with your money.
You can pay for household expenses by splitting them (use an app for that: Splittable).
Whichever decision you take regarding your accounts make sure you discuss it with your partner!
Photo Credit: Unsplash / Caleb Ekeroth.
