6 Key Considerations When Combining Finances with a Partner or Spouse

Money may not be able to buy happiness. But it can determine how happy you are in your relationship. In fact, studies show that money is the number one issue married couples argue about, and arguments about money are a top predictor of divorce.

Indeed, combining finances with a partner or spouse isn’t just about merging bank accounts and credit cards. It’s a journey that requires open communication, mutual understanding, and careful planning.

The good news is with the right attitude and approach, you can successfully navigate the challenges involved with combining finances and build a shared financial life that works for you, not against you.

Here are 6 key considerations when combining finances with a partner or spouse:

#1: Your Financial Habits

Very few couples are financially compatible from the outset of their relationship. In fact, one survey from Ameriprise found that 73% of individuals have a different money management style than their partner.

Unfortunately, failing to address these differences can lead to disagreements, tension, and possibly the demise of your relationship. That’s why it’s crucial to understand each other’s financial habits and values before combining finances. This is the foundation upon which your shared financial life will be built.

Start by discussing your spending habits, savings approach, and attitudes towards debt. How do your values line up when it comes to preparing for the future versus enjoying life today? These conversations will give you a better understanding of how each of you views money and uses it to achieve your goals.

In addition, addressing these aspects of your financial life can help align your expectations and prevent future conflicts. If you’re not sure where to start, consider engaging a financial advisor or coach to help facilitate these important conversations.

#2: Your Lifestyle Objectives

Once you’ve addressed big picture topics like your financial values and goals, you can begin to have more practical conversations. For example, how will you approach bills and discretionary spending decisions as a couple? What happens if one of you loses your income temporarily?

While no one enjoys budgeting, creating a joint budget with your partner can be an effective tool as you figure out the best way to manage day-to-day financial decisions together. This will allow you to track your joint income and expenses and ensure you stay within your means as a couple.

At the same time, creating a joint budget can give each partner a sense of buy-in when it comes to your shared financial life. When you both feel responsible for your financial well-being, you’re more likely to make decisions that align with the shared future you envision for yourselves.

Ultimately, it’s essential to come to an understanding about how you’ll use your money today versus how you’ll use it to create the future life you desire.

#3: Whether You’ll Have Joint or Separate Accounts

A key decision when combining finances with a partner or spouse is whether to have joint or separate accounts. While joint accounts can promote transparency as well as a sense of shared responsibility, separate accounts can be effective if you have different spending and saving habits.

In some cases, you may want to have separate accounts for personal expenses while opening joint accounts for shared expenses and future financial goals. This approach can help bridge the gap between maintaining your financial independence and sharing your financial life together.

Every couple is different when it comes to the nuts and bolts of combining finances. It’s important to find a balance that works for both of you today, knowing you can always adjust your approach as your relationship and financial life evolve.

#4: How You’ll Deal with Debt

Debt can be a contentious issue in relationships. According to a study by Ramsey Solutions, the higher a couple’s debt burden, the more likely they are to argue about money.

If you and/or your partner have excessive debt, dealing with it early and effectively can help prevent it from becoming a major problem in your relationship down the road.

First, have an open and honest discussion about why you’re in debt. Remember, this isn’t about passing judgment or blaming the other person for past mistakes. It’s about understanding the impact of debt on your financial health as a couple and proactively working together to become debt-free.

Once you have a clear picture about what you and your partner owe, you can develop a plan to get out of debt. This might involve prioritizing high-interest debts or consolidating debts to simplify repayments.

Talking about debt can be uncomfortable for any couple. But the sooner you get ahead of it, the sooner you can start focusing on other, more inspiring aspects of your financial life together.

#5: Your Plans for the Future

When it comes to combining finances with a partner or spouse, it’s important to be on the same page about how you envision your lifestyle in the future. At the end of the day, your plans will influence your savings habits, your investment approach, and the lifestyle you can afford today.

Meanwhile, discussing your plans for the future can provide peace of mind that you’re both working towards the same financial goals. It can also strengthen your relationship by fostering open communication, mutual understanding, and shared decision-making–all of which are essential for building a successful financial life together.

#6: Your Communication Preferences

Combining finances is a journey, and ongoing communication is the key to long-term success. Regular financial check-ins can help you stay aligned with your financial goals, adjust your habits when necessary, and quickly address any financial issues that arise.

Yet communication isn’t just about discussing numbers. It’s also about sharing your financial fears, aspirations, and expectations while listening to your partner and understanding their perspective. It’s this aspect of combining finances with a partner or spouse that can lead to a healthier and happier relationship.

In fact, 78% of couples who talk about money at least once a week report having a higher level of happiness in their relationship, according to a study by TD Bank. Meanwhile, only half of couples who discuss their finances less than every few months say they’re happy.

SageMint Wealth Can Help You Develop a Plan for Your Shared Financial Life

Combining finances with a partner or spouse is a significant milestone that requires careful consideration and planning. However, with open communication, clear financial goals, and the right guide, you can build a successful financial life together.

A fiduciary financial advisor like SageMint Wealth can help you navigate the intricacies of combining finances and chart a course toward a secure financial future. If you’re ready to take the next step in your financial journey, we invite you to schedule a call with us.