6 Steps for Combining Finances as a Couple

By Octavia Wealth Advisors

For many couples, combining finances is a significant “next step” in their relationship. Usually, it’s because they’re about to get married. Or maybe they’ve decided to move in together and share some expenses. Sometimes, after months or years of keeping things separate, couples decide to merge their money because they’re having a baby, buying a house or starting a business together.

Sharing responsibilities and goals with the one you love can make managing your financial life simpler and more practical. It could even make living together more enjoyable.

That’s right: According to new research, couples who shared a joint bank account said they feel better about how they’re handling their finances and they fight less over money. Who doesn’t want that?

Beyond the day-to-day budgeting and bill-paying, figuring out your finances together can help you establish your values and priorities as a couple. Here are six tips that could help you avoid conflict and bypass potential problems.

  1. Start with an Honest Conversation About Where You Stand Financially. Be open about any debt you’re carrying—from credit cards to student loans. Then make a plan for how (or if) you’ll share that debt. You may find it’s helpful to get a free copy of your credit reports from each of the three major credit bureaus. Your bank or credit card company may offer free access to your credit score. This information can help you determine how healthy your credit is and if there are things you need to work on before you pursue certain financial goals.
  2. Lay Out Your Short- and Long-Term Goals. Are you or your partner thinking about going back to school? Are you hoping to change careers? Have you thought about whether one of you will be a stay-at-home parent if you have kids? This is your chance to put it all on the table—from the practical (saving for a home) to the fun stuff (traveling around Europe or buying an RV.) Don’t forget about your long-term goals, including whether you hope to retire early. Your objectives will no doubt evolve over time; still, it’s a good idea to have a solid starting point.
  3. Decide Which Accounts You’ll Share. Once you’ve agreed to merge your finances, one of your first steps will likely be to open a joint checking account. But how do you plan to handle things from there? You could use your joint account for everything (which is easier but not without hiccups). Or you may decide to take an approach that allows each of you to keep some money in your own spending account while most everyday expenses are paid out of the joint account. You’ll also want to discuss whether you should open a joint savings account (or accounts) to hold the funds you’ll use for big purchases and unexpected bills. Borrowing should also be a part of this conversation: Will all your loans (car loans, mortgages, personal loans, etc.), be in both names going forward?
  4. Make a Budget. This may be the most labor-intensive part of combining your finances. It starts with making a list of all your income sources and how much you expect to bring in after taxes each year. Then you’ll list your essential monthly expenses (rent or mortgage payments, utilities, food, etc.) and nonessential expenses (things like entertainment, travel and hobbies). The main objective here is to prioritize your monthly and annual costs as a couple, so don’t forget about saving and investing. If you’re both working, you might already have your own 401(k) or similar retirement accounts. But you may decide you want to add to those plans with a joint brokerage account or other strategies. Check out Octavia’s Household Expense Worksheet for help putting together a budget you can stick to.
  5. Decide Who’s ‘Mostly’ in Charge of Money Management. Will you sit down together to pay your shared bills, split the duty, or will one of you take on most of that responsibility? No matter what you decide, make sure you both know every password and account number attached to your accounts. (Trust is a must when combining your finances.) It can also be useful to schedule regular “meetings” to go over how you’re doing with your saving, spending and investing, and to raise concerns before any problems get out of hand.
  6. Protect Each Other and Your Future. Even if you already have health, life, home and car insurance policies in place, it’s important to reassess your needs as a couple. Your Octavia advisor can help you evaluate your current insurance coverage and discuss taking further steps to help protect yourselves and your loved ones.

Ready to Get Started?

As you prepare for this next stage of your relationship, keep in mind that your Octavia wealth advisor is always available to answer questions, discuss the pros and cons of different financial strategies, and serve as an unbiased sounding board.

Schedule time now to meet with your Octavia wealth advisor about blending your finances as a couple and to plan how you can successfully reach your financial goals.

Please see Important Disclosures.