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There's a reason why money is a common source of relationship conflicts: It's a topic that's difficult for many couples to talk about. We all have complex, emotional relationships with money, and it might feel especially uncomfortable to reveal your detailed financial situation to the person you're building a life with. But ignore that little voice that says discussing money is taboo or that you'll scare them away—avoiding the topic can make things worse for your relationship (and your finances).
It's important to talk about finances before you move in together, and it often warrants revisiting as you get more serious and consider combining finances. After all, we can't read each other's minds, and the best decisions are made with accurate information rather than assumptions.
Here are seven questions to yourselves before you and a partner combine finances. Starting with these questions can be a way to start working together as a team and avoid future conflict.
1. How Is Your Current Financial Health?
If you and your partner haven't had a heart-to-heart about where you each currently stand financially, this is the time. You don't have to disclose every single account balance, but you need a sense of each other's debt, earnings and savings.
The reality is that combining finances with someone who's debt-free with savings looks different from doing it with someone without an emergency fund who is still paying off large amounts of student loan and credit card debt. If your partner's financial health needs improvement, you might consider holding off on combining finances until it's solid so your finances remain unscathed.
2. What Are Your Financial Goals?
After finding out where you each stand, get on the same page about the future and your financial goals. If one of you prioritizes buying a home but the other prefers spending money on vacations, you could experience conflict—especially if you haven't discussed it. Some financial goals worth discussing include:
- If either of you has a primary savings goal for short-term or medium-term goals, like a mortgage down payment, new car or vacation
- If either of you has an emergency fund or need to prioritize building one
- If you'll buy a house together and what that looks like financially
- When you each hope to retire and if you've already started saving
- If you want to save for other expenses like vacations or holiday gifts individually or together
3. How Do You Balance Saving and Spending?
Ask your partner if they identify as more of a spender or a saver. Have they found it easy to be frugal and save but struggle to splurge? Or do they tend to overspend and not set aside savings? Review both saving and spending:
- Saving: You may want to disclose how much you've already saved for different purposes if it's relevant. Then discuss how you'll approach this as a duo. Will any current personal savings accounts become shared, or will you each keep yours separate and open new accounts for joint savings goals?
- Spending: How have you managed spending so far, and how will you tackle it together? Do either of you already use a budget, and will you create a budget as a couple? If so, using which budget system?
4. How's Your Credit?
You and your partner maintain separate credit scores, even if you get married, but their credit score can still impact certain aspects of your life and finances.
If you plan to buy a house or a car together, you'll typically apply for the mortgage or auto loan together. Both credit scores are checked, and if one of you has bad credit, it may mean denial or a higher interest rate. In those cases, you'll need to discuss if it's better to only have one person on the loan or hold off.
The same applies to opening a joint credit card together, since someone with poor credit may not get approved. A credit check is also commonly run when you apply for a lease, so if you plan to rent an apartment or home together, know that their credit can impact you. If your partner's credit scores are low, you might request they work to improve their credit before you apply for anything new together.
If possible, consider inquiring about the causes of their bad credit so you can keep an eye out for red flags and potentially help address issues. Say their credit score is low because they forget to pay bills on time. If you move forward with combining finances, maybe you'll play a bigger role in ensuring on-time bill payment so neither of your credit scores suffer.
5. How Will We Handle Windfalls?
Say you combine finances and share income, debt and savings in an equitable way. But what happens with money that one of you receives as a windfall, like a work bonus, birthday gift money or a tax refund? Will you share or keep it separate? If shared, will you put it toward debt, savings or a splurge?
Not having a plan for windfalls could cause conflict later if either side has assumed different outcomes. Discuss what you both think is fair, whether it's a rule of thumb or a decision to handle them on a case-by-case basis. Then, if a windfall arrives, you'll both already know exactly what to do.
6. How Much Should We Combine?
Combining finances with your partner doesn't have to be all-or-nothing; tailor it to your needs and comfort level. Some couples may prefer merging everything, while others might only want to combine some aspects of their finances and keep others separate.
There's no rule that says you now must exclusively use joint checking and savings accounts. You can always keep your personal accounts and open new joint ones for shared bills and goals. You could also choose to combine savings but not have any shared credit cards. Go with your gut, and remember you can combine or separate accounts later if something doesn't work well.
7. Do We Live in a Community Property State?
If you're married or plan to marry, check to see if you live in a community property state, since this has major legal and financial implications. The nine states that use this legal framework consider most income, debt and assets obtained after marriage as jointly owned—even if only in one person's name. In other words, if your spouse takes on debt after you're married, even if it's only in their name, you're likely still responsible for it.
Be aware that inheritance remains separate property, even if you're married and in a community property state. However, that right disappears if you commingle it in a shared account. Same goes for money you had before marriage: If you keep it in your personal accounts, it remains your separate property.
These laws might sometimes feel unfair and catch couples off guard, so research any potential implications as you plan for combining finances. If you do marry in a community property state but want to keep certain things separate, a prenuptial or postnuptial agreement can often override the laws.
Learn and Grow Together
You and your partner may come up with what you think is a rock-solid plan, but in practice, it might not work so well. That's OK! We'll say it again: There's no one right way to combine (or not combine) your finances. Feel empowered to get creative, try different strategies and make adjustments as you learn together and work as a team to conquer financial goals. When you strive to communicate openly and honestly about money, you'll also reduce your chances of relationship conflict.