The do’s and don’ts of combining finances with your partner

Millennials are paving the way for new traditions.

They are renting instead of buying, working remotely instead of in the office, and marrying much later. With that said, millennials are still forming healthy relationships.

They are cohabiting, sharing rent, and even having children before putting a ring on it.

However, deciding to move in together comes with a lot of financial decisions couples forget about. Many couples are deciding to merge finances before tying the knot.

Money management for unmarried couples brings up a lot of tough questions and conversations. Maintaining a healthy relationship is tough. Throw money into the mix and it can either make or break your relationship.

There is no set formula for how you should combine finances with your partner. However, check out the infographic Haven Life created below for some quick tips on what you should and shouldn’t do.

Every couple’s relationship is different.

What works for one relationship may not work for you. So, it’s critical to do what feels right for you and your partner. Below are five approaches to finances that have worked for couples like you.

1. The “Equal” approach

What it is:
Keeps most finances separate except for one joint account that you both contribute to equally.

Who it works for: Great for couples who consider themselves to have equal income and finances.

Who they are: Steven and Angela are in their late 20’s and have been living together for about a year. They both work hard and are successful in their careers. Neither has significant student loan debt or loans to pay off and they make around the same salary.

Together, they decide to set up a joint checking account for shared expenses such as groceries, rent and date nights. They both agree on an amount to contribute to the account each month.


2. The “Equal Percentage of Earnings” approach

What it is:
Similar to the approach above, except instead of contributing the same amount to a joint account, you will be contributing the same percentage of each of your paychecks.

Who it works for: Say your partner makes a substantially larger income than you or vice versa. This approach helps even the playing field.

Who they are: Alice started a health company five years ago and it just recently started taking off. She is now making significantly more than her boyfriend, John, who is a freelance graphic designer. They have talked of marriage and buying a home together.

Alice wants to move to a wealthier neighborhood. John is afraid he won’t be able to support the mortgage with his current income. Together, they decide to open a joint account where they each contribute a certain percentage of their earnings.


3. The “I Got You Next Time” approach

What it is:
In this approach, you will take turns picking up bills and/or expenses for the other.

Who it works for: Perfect for couples who were on the fence about combining finances.

Who they are: Sierra and Mitch just moved in together. Mitch has a significant amount of student loans to pay off while Sierra has no debt at all. Mitch makes around $5,000 less than Sierra, but he loves to grocery shop and plan out their meals for the week.

To make their finances easier, Sierra and Mitch decide to split their bills. Sierra pays for cable since she loves to watch football and Mitch decides to pick up the grocery bill because he loves to cook. Sierra, in return, buys a nice dinner out once a week.


4. The “It’s On Me” approach

What it is:
When one person pays for all expenses in the relationship.

Who it works for: A couple where one partner earns a larger salary than the other, or is the sole income earner.

Who they are: Mia and Alex have been living together for some time now. Alex just got accepted to grad school where she plans to get her Ph.D. However, during that time she will have to quit her current job.

Mia makes a solid amount of money and has agreed to help pay the bills and the majority of expenses while Alex goes back to school. They have talked about the possibility of marriage and having a more equitable approach to finances once Alex has gotten her degree.


5. The “What’s Mine Is Yours” approach

What it is:
This is when you and your partner combine finances entirely and equally.

Who it works for: Married couples or serious couples who see marriage in their future.

Who they are: Kendra and Riley are getting married in a few months. They have discussed saving for a house and eventually a family. Kendra has some student loans, but Riley has agreed to help her pay them off. They decide to open a joint account where each of them deposits their monthly income. They use this account to set aside savings and pay for bills. They’ve also agreed to start saving for a down payment on a home.

Managing money together can help bring you closer as a couple.

However, it can also tear you apart if you don’t approach it correctly. It’s important to be open and honest about any concerns and discuss different approaches that will work for both your relationship and finances.

Whether you decide to go all in and open a joint account or take it slow and start by picking up each other’s bills, create a monthly budget or spreadsheet that lays out what is combined and what is not. Doing this successfully will always come down to communication, your willingness to compromise and trust. Remember to do what’s best for you as a couple.

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