Joint finances can put a considerable amount of stress on a couple, but it doesn’t have to be like that. Two people who set goals — and accomplish them — can successfully manage money as a couple.
But it is good to remember there are pros and cons to sharing finances. If you are considering a joint bank account or some combination that mixes your earnings, savings, and bill-paying, here are some things to think about.
Managing money together
One of the steps that many couples take is to combine their bank accounts. This is the perfect time to begin managing money together.
There’s a lot to consider when you move in with your partner and start to share finances. How you choose to manage your money will depend on your specific situation, but there are some general tips that couples might want to consider.
Create a budget together
Talk about money with your partner as you work to create a budget together. Define your goals and financial values and try to come to an agreement on the big issues, like what you should spend money on each month.
Think about opening a household checking account
Paying bills as a couple can be complicated when you’re working from two separate accounts. A joint account could be helpful because you can pay all of your household bills from one place and may make it easier for you to track pooled expenses.
Once you work on the budget with your partner, you will be able to figure out how much money you need to add.
Add your spouse as a beneficiary on your 401(k)
After getting married, consider adding your spouse as a beneficiary to all your 401(k) and other retirement accounts. You won’t want these accounts to be in limbo if an unexpected death occurs. While you’re at it, update the beneficiaries of your life insurance policies as well.
Maintain a level of financial independence
Sometimes, one partner in the marriage will become dominant when managing the household finances, and the other will take the backseat. Although one person may be more skilled when it comes to managing money, it is a good idea to continue to stay involved with your finances.
Many couples seek to maintain levels of financial independence despite joining finances with their partner. This may not only be good for your relationship, but it’s also good if you end up having to manage your finances on your own.
Have regular money conversations
Being open and honest about money can be difficult for some couples, but it could help if you are going to grow your financial stability together. It’s a good idea to have regular conversations — perhaps weekly or monthly. Look at how much you have in your accounts, whether you are sticking to your budget, paying off debt, or putting some money into savings.
Set a goal to make sharing finances and budgeting worthwhile
Let’s be honest. Sticking to a budget is no fun for anybody. It can feel limiting and restricting. So, it’s a good idea to have shared goals that will make your budgeting efforts worthwhile. When you envision a future with your partner, what do you see? Align your future goals with your current finances and create a budget from there. This plan of action may make the sacrifices worth it.
What’s the best way for couples to manage their money together?
Some of the best ways for couples to manage their money together is to create a budget with goals, have at least one joint account and maintain open conversations about money.
Should you share money in a relationship?
This is based on your personal preference. It may be beneficial to open at least one account together. So you can easily budget and pay bills.