If you are ready to move in with your partner, are getting ready to get married, or looking to combine your finances with your spouse, partner, or significant other, here’s a good video for you to watch!
While there are no one-size-fits-all when it comes to coupling your finances, there are steps you can take to ensure a more positive start to the conversation. The overall key component to financial success with your significant other is to have an upfront conversation and schedule a time together when you’re both ready, open, and prepared with your financial information. Then you can best make a plan that fits everyone’s individual needs.
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Video Transcript:
Hey, it's Alex and it's episode number 94 of Money Hacks. We hold one-on-one coaching sessions with investors and retirement plan savers on a regular basis and I love sharing the questions that we get in these money hacks videos, a recent one was around somebody moving in with their partner and wanting to know how to divide up their expenses or divide up their finances. So, I'll answer that in the context of if you're perhaps moving in with a partner getting ready to get married, or looking to combine your finances with your spouse, partner, or significant other.
How do you approach that? First of all, the short answer is there's no one way, there's not one prescription in how to manage your financial picture with a partner, with a spouse. But a key component to success is having an upfront conversation and being able to set a time together where both parties, you and your partner come with your financial information.
You come with your goals and you can have an open, honest, non-confrontational conversation about your overall financial picture today and your goals for tomorrow, the next few years, and the long-term. Some people like to keep everything separate and they have separate bank accounts and financial assets.
Every month they're allocating or splitting certain shared expenses like rent or mortgage and maybe they're doing that 50/50, or if one individual is earning a higher income, they might pay a little bit more than the other one. Other couples will put everything together into a joint account and manage it in one unified joint account.
As I said before, there's no right or wrong answer, but the big crux of this is ensuring that you can have that upfront conversation and really be honest with one another about what your financial picture looks like today. Even if that means talking about, you know, hard topics like credit card debt or personal loans or a bad credit score, as well as perhaps positive topics like a good emergency savings cushion that you've built up and then work together on understanding your goals and where you agree, and where you may disagree. Personally, I've set my financial picture up in a way where a lot of our expenses come out of a joint account.
Myself and my spouse, we still have some portion of our finances in individual accounts, so it gives us autonomy on the different spending habits, and spending needs that are important to us, but also a unified picture for a lot of our collective financial expenses and financial goals. So, great question. There's a lot there I think that is going to be unique to each individual scenario, but I hope this is helpful and we'll see you next time. Thanks!