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10 Essential Tips to Successfully Merge Finances as a New Couple

Personal Finance

What’s the best way to start handling finances as one household?

A couple smiling while looking at each other.

Fifty years ago, merging finances may have seemed simpler. Most people got married younger, chances were higher that only one spouse worked, and divorce was less common.

Now, when you become a couple, you’re more likely to work and have your own incomes. You may be older and possibly already have children. You may form a household without getting married. All these factors make a big difference in how you choose to merge finances – if you merge them at all.

There’s no one right way to handle finances as a couple, although, there are plenty of wrong ways! Tweet this

These 10 tips can help you make the transition to financial coupledom successful:

1. Don’t assume you have to merge everything at once

That can be scary for some people – not to mention that it’s a lot of work. You may open an account together and start sharing bills, but you don’t have to co-own every account and money pot immediately.

It may not even be a good idea to add each other to all credit cards right away, especially if one person has a better credit history than the other.

2. Decide together how much of your finances you eventually expect to merge, or not merge

Try to sort this out before you get married or move in together.

3. Communicate, communicate, communicate

You’ve heard it before, but it’s true. Even if one of you takes over paying the bills and handling day-to-day finances, you must both know how you are doing financially and other aspects of your financial life.

Financial secrets, such as hidden debt, can be deadly to relationships. You can’t demand trust. You can only build it day by day as you communicate with each other.

4. Make a budget or “spending plan,” if that sounds better

Each of you should know what you can spend on groceries, clothing, and other budget items without getting in trouble.

5. Make sure your spending plan has a little room in it

Unrealistic budgets don’t last. Nobody wants to be pestered over every dime they spend. Build a little pocket money into your plan every month.

6. Change wills, beneficiaries, life care directives, and other important items

If your situation is complex, be sure to get qualified legal help.

7. Include adult children in major financial discussions

Grown kids can be nervous about Mom or Dad getting married, especially if they are expecting an inheritance, or if they plan to care for you as you get older.

8. Set a money limit you can each spend before consulting with each other

It may be $50, $500, or $5,000, but each partner in a household should know what he or she can spend without telling the other. Budget items, like wholesale club runs for groceries, are exempt from this rule.

Pulling up the driveway in a new car you forgot to mention is not.

9. Remember you are equals

If one of you has more money, that doesn’t give you more decision-making power over joint funds.

10. Set goals together

Managing money is more than a necessary nuisance. It’s also an area in which the two of you can dream. You’ll be a lot more likely to work together financially when you have joint goals for your future together.

How much money do you or your partner spend before you consult with each other?

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