10 Tips on How to Combine Finances as a Couple
Combining finances as a couple is a big step— congratulations! It's a big decision, and figuring out how to merge your money habits, spending styles, and financial goals can be overwhelming. It’s not just about dollars and cents; it’s about trust, teamwork, and building a life together.
To help you navigate this big step and make the process smoother and stress-free, this post dives into 10 tips on how to combine finances as a couple.
1. Communicate, Communicate, Communicate
Before merging accounts or splitting bills, plan to have some honest conversations about money. Discuss your income, debts, savings, financial habits and goals, values, concerns, and fears. The goal is to understand each other’s past experiences and perspectives to set the foundation for a strong financial partnership. If you’d like a set of questions to discuss, here is a good resource.
2. Define Your Shared Vision
What are you working towards together? Paying off debit, building an emergency fund, or buying a home? Identify your short-term (6–12 months), mid-term (2-5 years), and long-term financial goals (5+ years) goals. Identifying shared goals gives your finances a purpose and helps align spending. Ensure you both are on the same page and prioritize your goals accordingly.
3. Build a Budget Together
Make a budget that works for both of you. Start by tracking your income and expenses for a month to get a clear picture of where your money is going. Then, categorize your expenses into needs (housing, food, utilities) and wants (entertainment, hobbies). This will help you prioritize your spending and make adjustments as needed. After that, decide how much you’ll contribute to shared costs.
4. Agree on How to Split Expenses
A common way to split expenses is to contribute based on a percentage of each person’s income. For example, if one person earns 60% of the household income and the other earns 40%, they can split shared expenses in the same ratio. This way, contributions feel fair while taking income differences into account.
5. Decide Which Accounts to Combine
Many couples start at least by opening a joint account for shared expenses like rent, groceries, and utilities. Once married, consider combining your checking and savings accounts to simplify your finances. You can still keep separate accounts or create a fun fund for personal expenses, like hobbies, gifts, or clothing
6. Be Honest About Debts and Pay Off High-Interest Debt
Whether credit cards, student loans, or car payments, lay everything on the table. Work together on a plan to tackle it as a team, tackling high-interest debt first, such as credit card balances. Consider consolidating debt into a lower-interest loan or balance transfer credit card.
7. Make Big Purchases a Joint Decision
Avoid surprises by agreeing to discuss major purchases. Set a dollar threshold for what qualifies as “big” and stick to it.
8. Build an Emergency Fund
Life happens—car repairs, job loss, or unexpected medical bills. Create a joint emergency fund to cover 3-6 months of living expenses. This will help you avoid going into debt when unexpected expenses arise and also provide peace of mind.
9. Automate Your Savings
Set up automatic transfers from your checking account to your savings and investment accounts. This way, you'll ensure that you're saving regularly without having to think about it.
10. Check In Regularly
Set up monthly or quarterly money check-ins. Use this time to review your budget, celebrate progress, and adjust your spending habits and goals as needed. Checking in regularly keeps you both on the same page. Make it fun! Put on some music, buy some snacks and your favorite drinks.
Final Thoughts
Combining finances is about building a partnership. By following these tips, you can build a strong financial foundation for your relationship and achieve your shared goals. Take your time and communicate openly.
NEED HELP COMBINING YOUR FINANCES?
If you're struggling to combine your finances or need personalized advice, consider reaching out to us to help you create a customized plan to identify and achieve your financial goals.
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