Posted by on November 12, 2024
Although combining finances can be a daunting process, there are ways to help assure you and your partner are on the same page. Relationships are about compromise and finding a solution that works best for you and your partner, so there are no right or wrong answers!
Here are some tips to help you navigate the transition:
Determine what combining finances means to you and your partner:
There are several options to consider. You can each contribute in a way that is proportional to your income, contribute the same amount regardless, or completely combine everything.
This article can help you learn more about these different methods.
Be open and honest about your financial situation:
You must share all necessary information in a way that is easy to understand. Address all concerns. Remember, don’t judge each other’s finances! This is crucial to establishing an open dialogue without interrupting your progress.
Establish your goals and priorities:
Are you saving to buy a house? How much can each of you contribute to retirement accounts? Do you want to start a family? Create a list of questions to ask each other to define what is most important to you and your relationship.
Get to know your cashflow and liabilities:
Start creating lists. These lists should include your income, all essential and non-negotiable expenses, variable expenses, and all debt accumulated by each person. This will help you get on the same page to help prioritize budgeting.
Create a joint budget:
After assessing your income, expenses, and debt payments, combine what you will spend on essential and non-essential expenses that cover both shared and individual needs. Agree on amounts you believe are sufficient for your current cash flow while taking debt payments into consideration. Decide who will be responsible for each of the items on your list. And then make sure you track your spending!
Consider a joint checking and savings account:
The checking account will be used for paying your bills (rent, utilities, etc.) and the savings account will be used to create a joint emergency fund. As a couple, you need to be prepared for any changes in income, home repairs, and other emergencies that may arise. Aim to keep at least three to six months of living expenses on hand if you both are earning an income. You could also consider opening another joint savings account to save for your other goals.
Ask for help:
If you are struggling to find a system that you both agree on, consider speaking with a financial marriage counselor or financial planner.
Disclaimer: This post is for informational purposes only and is not to be considered investment, tax, or financial advice. Cornerstone does not and cannot guarantee the accuracy or applicability of any information presented in this post regarding your individual circumstances. Please review your personal situation with your tax and/or financial advisor.
