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Deciding to combine your finances with your significant other is a big decision. Finances can be a tough conversation to have with anyone, it always feels like such a private thing. I mean, it does expose quite a bit about you.
When my husband and I got engaged we started sharing our finances. At first, it was like, oh crap, he is going to know I spend too much on bikinis! But I quickly realized he wasn’t going to judge me for my excessive spending. Because here’s the thing, he had things that, in my opinion, he spent too much money on too. It was just a difference in opinions, but something to easily come to an agreement on.
I know several couples who have decided against sharing finances, but we thought it was the best thing for us.
If you are still deciding, I listed pros and cons at the bottom of the post that we have noticed.
As a note, at the time Kiefer did not work in finance. We were also still adjusting from the “broke college student” mentality. Meaning whenever we had “extra” money we definitely spent it.
Now we share everything.
We just have some bills and some credit cards in just one person’s name.
The bills are just split that way so we can share the responsibility of paying the bills. Plus it is way easier to remember the three bills you are responsible for vs. the 90 billion there seems to be.
With the credit cards in one person’s name, it is nice to have a card in just your name so that you can be secretive about gifts! We still let each other know how much is owed on that credit card.
HAVING THE CONVERSATION
What I would do if you and your significant other haven’t had a chance to talk about money, or you have been avoiding it, is sit down and have an honest conversation. Otherwise how can you successfully combine your finances?
Can’t give up your weekly manicure appointment? Or maybe your significant other has a costly weekly bar date with their friends?
Put it all out there. It will be better to get it all out and have a good discussion about it than to try to hide things that come back to bite you.
A huge thing with this is to not get defensive about your spending habits. Don’t cause an argument because your significant other is asking you about something you spend money on often.
Getting defensive can cause you to shut down to the entire conversation. Which can make an already uncomfortable, but necessary, conversation more uncomfortable.
Instead, see this as a chance to educate them on why you feel this spending is necessary for you. You might even realize something may no longer be all that necessary to you, but was just a habit.
With this “education” don’t get sassy. Remember that they are probably just trying to understand, not be malicious. Chances are your significant other might not understand why you need a mascara that costs as much as the internet bill for the month. Just like maybe you won’t understand why they need some doo-dad for their car.
Both you and your spouse need to be respectful and open to listening to what is important to each other without judgement.
The goal is to feel good coming out of this conversation. You Shouldn’t feel like you are having to leave something behind that is important to you, and neither should your spouse.
BE HONEST ABOUT YOUR SPENSING HABITS
This has to be the most important part if you want to combine your finances without drama.
Well, really, the honesty part is.
Kiefer and I became close friends when we were 18 years old and spent a lot of our after class hours with each other. Spending all of this time together allowed us to, without noticing, pick up on the other’s spending habits.
We are both the type of people that are like, “If I want it, I am going to get it.” No regrets. Well, maybe a little “oh crap” when we saw the change in our bank account.
Having this kind of understanding between the two of us creates a friction-less relationship in that we are aware of this in each other. What helps with this mentality is that we both only buy things that we really want, not just things that will be added to our storage closet.
Neither of us had a shopping addiction at the time we got together either. Although Victoria’s Secret and I were very close friends for most of my college life. Resulting in some credit card debt and obsessive amounts of bikinis.
Another plus was that neither of us gambled or went on spending sprees that emptied an entire bank account after payday.
Anyway, just be honest. Lay it all out there.
BE OPEN ABOUT YOUR DEBT
Kiefer and I both had debt going into our relationship.
I AM TALKING ABOUT YOU STUDENT LOANS.
Okay, okay.
And maybe I had a problem when it came to Victoria’s Secret.
It is important to have this conversation and be honest. Since, you know, if you decide to combine your finances then you are sharing the debt as well.
This is not the time to feel guilty or embarrassed about your debt. I know it is easy to do so since you are sharing something that often is seen as “undesirable”.
Just remember that if you are marrying this person, or already married to them, they are on your team. Meaning hopefully they are supportive and aren’t going to make you feel bad for spending too much at Victoria’s Secret last month.
Or you know, wherever it was.
You shouldn’t make them feel bad for their debt either.
Remember that some debt is out of our control, like student loan debt. Some of us didn’t get full ride scholarships or have a college fund set up for us. So while the payments can be painful, the money was needed to try to further yourself with that fancy piece of paper.
This is also the time to get it all out there, don’t hide some of your debt from your significant other and think that you can figure out how to pay it off without them knowing.
If you do feel like some of the debt was reckless and they have no signs of slowing down their spending, talk about it. Just remember to be open minded and hear them out. It is totally fine to share a concern as long as it comes from a caring place.
TALK ABOUT CURRENT BILLS
This really applies to those of us that are moving in together for the first time. It is also good to bring up which bills you currently have.
After all, you dont want to combine your finances then find out you are both paying for Netflix.
This is also a good time to do an audit of what you are currently paying for. Maybe there is a bill hiding in there that pays for a service you aren’t currently using or hardly use. Or, if you just moved in together maybe there is a utility that neither of you are currently paying for since a previous roommate had it in their name.
You will also have some bills that you can consolidate beyond the regular utilities. For us, one of these bills was our car insurance, which we had different companies for. Since most companies offer a multi-car discount we picked one company and dropped the other to save a little.
DECIDE WHO PAYS WHAT
This is entirely up to you. You could divide the responsibility of paying certain bills or just have one person pay all of the bills.
We decided it was nice to have certain things each person was responsible for making sure was paid. Kiefer has most of his that he is responsible for set up for automatic payments so he just checks the bank account to make sure it posted.
I, on the other hand, am a control freak. So I still log into each website to make payments so I can be aware of any changes in the bill since I also elect for paperless statements.
I like doing this since some of the bills I am in charge of change each month, like electricity. And as I am sure most of you can relate to, every once and awhile we get a little crazy with the air conditioning or the heater and all of the sudden our bill is four times the usual cost.
Oops.
MAKE SURE YOU ARE BOTH AWARE OF ACCOUNT BALANCES
Kiefer and I are both really good at checking our account balances. I will usually check every other day. I also definitely check before I pay for something that is more expensive than a usual purchase for us.
Whenever I notice our account balance is getting close to where my “comfort zone” ends before we get paid again, I usually say something to Kiefer about it. Of course, this is silly for me because he already knows how much is in our account but it still makes me feel better verbalizing it.
It is good for both of you to understand how much money you usually get paid in a month and how much money you have as an outflow in a month. I am pretty sure my dad never has any idea how much is in my parents’ bank account, as he is always trying to buy things. Although the man can’t use a physical debit card, but unfortunately for my mom, he does know how to shop online.
COMMUNICATE ABOUT LARGE PURCHASES
This goes hand-in-hand with you both being aware of your account balances. Hopefully, you both understand that if you are making a larger purchase it would be nice to let your spouse know.
There is nothing more shocking than looking at your bank account and seeing a big drop. Since you both have access to the same account if you decide to combine your finances that means that two people now have access to spending that money.
Just make sure that you are clear about how large this purchase will be. I recently told Kiefer I was going to buy some “remaining baby items” that I felt we needed before our baby arrived. He was busy with work when I finally finished filling up the Amazon cart, so I thought I would just let him know after the fact.
Well, I forgot to tell him. He wasn’t upset when he found out, but he was surprised. You see, to him, he was thinking it would be under $200. Well, it was really twice that much.
To me I thought it was obvious it wasn’t going to be cheap, but I was also the one looking at the prices all day. And it isn’t like either of us had a bunch of experience with how expensive baby things can be.
COMBINING YOUR FINANCES: PROS AND CONS
For us the pros and why we decided to combine our finances were:
- Sharing finances made us feel like we were working towards the same financial goals.
- It made us feel like we were in a relationship and not just roommates.
- Doing this made our finances easier to understand since everything was in one account.
- It gave us some flexibility. So if one of us decided to switch jobs or take time off from work between moves we could do that without having to worry about “our portion” of a bill if we split them as we did with roommates.
- It also gave us more of an idea of what we could put towards debt every month. This is especially true if one of you has less debt than the other and similar income. We found that this allowed us to feel more comfortable making larger payments.
Why you may not want to combine your finances or cons:
- You will likely inherit some debt
- You may hesitate more with spending for fear of being judged or it causing an argument. This is why it is important to be honest with what is important to you.
- Being secretive with gift-giving gets tricky, but remember that you can always use cash or a credit card if you keep one in just your name.
- It can cause arguments if you both aren’t honest.
Finances don’t have to be a scary or hard conversation to have. Just relax and remember to be honest with each other. And again, I know that some people prefer to keep their finances separate, you just have to think about what is best for you and your spouse.