How Do I Combine Finances with My Partner?

Let’s just get this out of the way at the beginning: There is no one right way to combine finances with your romantic partner. The “right” way differs from couple to couple…and over time for the same couple!

I get asked this question a lot by my clients. Maybe they were single when they started working with me and became a couple afterwards. Or they were already in a couple but hadn’t yet reached the stage where they thought about combining finances. Or they did have some version of combined finances (Splitwise, anyone?) and feel it’s no longer working for them. I think I have learned more from my clients about how to combine finances than I ever had to offer them, and I will pass that learned wisdom on to you.

In the tech industry, especially, your finances can get complicated real quick. Multiple by two, and yowsahs:

  • all the different sources of income each person has and
  • the various ways you each have to save (401(k) before-tax or Roth or after-tax, HSA, FSA, brokerage account, bank accounts, deferred compensation plans) and
  • the relatively high-spending lifestyles that most people in tech (whom I know, at least) have.

Today I’m going to keep it pretty simple and just focus on one issue of joint finances: spending (and the bank accounts and credit cards it involves).

There’s plenty of other stuff to consider. Eventually. Saving for future goals. What to do with investment and retirement accounts. But that’s for another day.

Different Approaches You Can Choose From

You can imagine that there’s an infinity of possibilities, starting from “We don’t share finances at all” to “Everything is joint and we think only of Ours.” Let’s explore some of the possibilities between those two extremes (acknowledging that the variations are probably endless).

Most Separate: Keep All Accounts Separate and Just “Trust” That It’ll be Even Enough

This is how it started with me and my husband.

  • Pros: You don’t have to change a damn thing about how you currently manage your finances. You don’t have to track anything.
  • Cons: You might feel as if you’re shouldering an unfair burden. And because you’re not tracking, that could be true…or not.

Keep All Accounts Separate and Reimburse Each Other for Joint Expenses

Use either a tool like Splitwise or a note-taking app or good ol’ pencil and paper to keep track of what joint expenses which one of you has incurred, and one person simply reimburses the other for half (or maybe pro rata based on your respective incomes?) of the shared expense.

  • Pros: You get to be exquisitely clear and confident that you’re equitably sharing joint expenses. And you don’t need to feel any weirdness about how much you spend on personal things.
  • Cons: Takes some amount of effort to track and reimburse expenses.

Maintain separate accounts for most stuff but add a joint checking account that covers joint expenses, and you both fund it.

Otherwise known as “his, hers, and ours” or “hers hers and ours” or “theirs theirs and ours”…you get the picture. You set up a joint checking account with your partner and then either do direct deposit from your paycheck or set up transfers from your separate bank accounts to fund it.

  • Pros: All the above benefits plus you have the convenience of having that joint account so you don’t have to fuss around with reimbursing one another. Your “liability” for your partner’s behavior is limited to the money in the checking account.
  • Cons: You still have to decide how much of your respective money to put into the checking account, and you’re still incurring expenses separately (you still have separate credit cards), so paying off a portion of your individual credit cards from this joint account could be hairy.

Maintain separate accounts but add a joint checking account and a joint credit card for joint expenses, and you both fund the checking account.

You have to set up a joint checking account, as above, and now you also also apply for a joint credit card. [Whether or not the credit card can be truly jointly held or whether one of you will be primary and the other an “authorized user” depends on the issuer.]

  • Pros: You have the convenience of having that joint account so you don’t have to fuss around with reimbursing one another, plus there’s an obvious match up between joint expenses (on the card) and joint payment (from the checking account).
  • Cons: Having a joint account with someone (or having them be an authorized user on your credit card) means you’re responsible for their behavior. If you have a credit card with your partner, and your partner runs up a $10k bill, that is your $10k bill. Also, you still have to decide how much of your respective money to put into the checking account.

Most Joint: All accounts are joint.

All bank accounts (checking, saving, money market) and credit cards are all jointly owned (or as close as possible for the credit cards).

  • Pros: Convenience is the name of the game here. Nothing is hidden from view or access. Either person can pay all the bills, withdraw or deposit money, incur expenses, etc.
  • Cons: All money in joint accounts and all expenses on a joint credit card are the responsibility of each person. If your partner ends up being a sociopath and runs off with all the money from your joint account, or runs up a $50k credit card bill, you have no recourse. That credit card liability is yours, and that money from the joint account is just gone. Even if they’re not a sociopath, if they have different money attitudes and behaviors, they can use “your” money in a way you don’t agree with.

Any accounts that remain separate create some level of inconvenience because only one of you has access to it. You can often provide “view only” access to your partner through various online financial tools, like mint.com or some of the tools I use in my practice, such as RightCapital (a financial planning tool) and Capitect (a portfolio management tool).

Different Stages of Life/Coupledom

I think it’s fairly obvious that different approaches are appropriate for different stages of a relationship. If you’re just dating, not livin’ in sin, then “keep it separate and maybe reimburse” is likely the way to go. If you’re married with kids and own a house together, then it’s reasonable to go all-in on the joint thang.

My Story

When my husband and I were dating, we kept everything separate, didn’t track joint expenses, and kinda just “took turns” paying for things. To be fair to him, he shouldered the majority of the expenses, due to a variety of factors: he was a man in this patriarchal culture, he has his own attitudes towards money and generosity, and he made notably more money than I did (quelle surprise!).

Eventually we moved in together, and we set up joint bank accounts, motivated by convenience…and supported by a more-or-less shared attitude towards money, and his profound desire to not have to think about this shit anymore and my isn’t it convenient that my fiancée is an aspiring financial planner and totally digs this stuff.  

I admit that I kept a separate “bug out” bank account for myself for years…with maybe $5k in it.  I did this less because I had any suspicions about my husband or our relationship and more as a nod to the reality that women are often trapped inside shitty relationships because they don’t have the money to get out.

Once we were married, we (okay, I) tallied our respective monies to see how even we were. He had a higher net worth than me, by a notable amount, but not by an order of magnitude. Maybe he had 1.5 times the money I had?

We decided to combine everything we could, even mushing all our investment monies into a “joint tenants with rights of survivorship” (JTWROS) investment account and moving everything to joint bank accounts. I think he kept his San Francisco Credit Union account for years…to pay his individual Discover Card bill (which he’d set up to auto-contribute to some international children’s charities years prior)…but after a decade or so of no longer living in San Francisco, he made the effort to just consolidate that, too, into our joint accounts.

We could have reasonably kept things separate while we were both still working, but fairly soon after we got married, I quit my full-time job, worked freelance for a while (way less income than I had been making), went back to school for a master’s, switched careers, and then had me some babies while working part-time in my new field. We were most certainly “all in” at this point.

Fast forward 5 or 6 years, and my husband quit his job to become a stay-at-home dad and I launched my own financial planning firm (becoming the sole breadwinner…a purely theoretical title for at least the first year or two). “Separateness” was a laughable notion throughout all of this.

Just Try Something and Iterate

As I mentioned above, different approaches are going to be better for different couples (different relationship to money? vastly different incomes or assets?) and for the same couple at different stages of their relationship. Witness how my husband and I evolved from “completely separate” to “completely joint.” You could reasonable choose to maintain some separateness forever in your relationship, and if it works for you, both logistically and emotionally, that’s the right solution for you.

So, if you’re struggling with the idea of what to do with your finances, just pick an approach, use it for a while, and see what works for you, what doesn’t, and tweak what doesn’t. Nothing is forever.

Be a Bit Cautious in Joining Finances

Having said “just try something and iterate!” there are some things that aren’t so easy to undo, In particular, changing ownership of an existing account from separate to joint. This needs to be one of the last things you do. And, in fact, many of my long-married couple clients still have accounts of various sorts in their individual names. You can much more easily and with less risk create new joint accounts and seed it with new money.

Ownership is a huge part of estate planning (you might encounter the concept of how an account is “titled”…which mostly boils down to who owns it). So especially when you’re taking money that has been yours and only yours and you decide to own it jointly, that has estate-planning implications. If you’re talking significant (to you) money, you’ll likely want to consult with an estate planning attorney before doing it. Of course, becoming legally married has its own rules about ownership, depending on the state you live in.

Take time to see how the relationship evolves. Looking back at what my husband and I did, frankly, is a little scary. I was very confident in our relationship and his trustworthiness…just like millions of women have been and then been totally screwed over by their partners. Thankfully, it has worked out well, but statistically speaking, it wouldn’t have been a shocker if it hadn’t.

Consider a pre-marital agreement, or at least the conversation leading up to it.

Joining finances is more than just whose name is on which account and where does my direct deposit go. It involves attitudes towards money, money habits and behaviors (and neuroses), and your goals for yourself and the couple. So, don’t be surprised it’s a thorny issue!

Do you want someone to guide you and your partner through uncovering your respective relationships to money and identifying the next, best step to take in joining your finances? Reach out to me at meg@flowfp.com or schedule a free consultation.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.

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