When Couples Should Combine Their Finances — and When They Shouldn’t

Sharing a life together doesn't necessarily mean sharing all of your accounts. But in some cases, it makes the most sense. Let's talk about how to spot the difference.

Sharing a life means sharing your financial realities. For better or worse, couples inevitably run into certain financial obstacles together and sometimes split expenses. The question is, which aspects of your finances should you tackle as a team and which should you keep separate?

Every relationship is different, with uniquely different financial realities at play. Nevertheless, for any two people building a life together, money will always play a key role. And a shared goal will always be financial stability. So even if you don’t combine everything, having clarity on what’s spent, earned, and invested can help couples get on the same page and healthily start new chapters of their combined lives, which is always a good place to be.

With that said, talking about money isn’t always easy. I’m sure many would argue that it rarely is. But coming to common understandings about things like this can make future money talks easier. By having a clear idea of what you should financially combine and what you shouldn’t, discussing finances will become a more natural, healthy part of your dialogue as a couple.

Here are the financial moves you should be making together, and the one thing you should consider keeping apart.

Create a Household Budget

Once two people merge their lives, living expenses inevitably change to some extent. No matter who contributes what, it’s in your mutual best interest to build a household budget and stick to it. Looking at your financial and combined financial situations, figure out what you will need and what you will spend. Stick to the most basic, essential expenses to start. And discuss the dreams you have for your shared future.

Whether you create a new combined budget or reassess and rearrange individual budgets accordingly, you need to decide on a household budget together. And so, it’s something worth working together on with the bigger picture and ease of day-to-day in mind.

At its most basic level, think of it as a mutual money understanding. Get ahead of any hard money talks and tough financial decisions by having a shared plan and finding common ground. Of the many financial health-oriented outcomes, you’ll be better able to support each other when and if emergencies or sudden expenses seemingly come out of nowhere.

Combine: Emergency Funds

money in buoy/life raft concept

Hopefully, your partnership is smooth sailing more often than not. But at some time or another, you’ll likely run into financial emergencies or obstacles that will affect you both in more ways than one. That’s why building a shared emergency can work for your mutual benefit. If you already have an emergency fund, you don’t necessarily need to get rid of it.

But you need to commit to a bare minimum each of you will be putting into this one and how often. You should also decide how big you think you’re emergency fund should be and assess how long it will take to get there together.

Sit down and build that budget with a combined emergency savings account in mind. It will be there to protect you and your partner, and your family. So prepare for any big expense that comes up that you’re otherwise unprepared for, and consider doing so together. Saved time will also prove to be a plus. Considering your emergency funds often take a while to build up, you’ll be able to reach your decided emergency savings amount much sooner when you’re both putting money in it.

Read More: Build an Emergency Fund in the Quickest Way Possible

Combine: Some Credit Cards

couple shopping online, making payment for purchase, using banking app or service on mobile phone

We all have money goals we’re working towards or planning for. But for some of the biggest purchases out there, it could take more than saving up to achieve them. Not to mention, when we couple up, it’s not just our credit that sometimes decides what we qualify for; it’s our combined credit.

For those in credit card debt, combining certain cards may prove in their best interest. Millions of Americans allow less than stellar credit scores and credit card debt to stand in the way of reaching some of their biggest financial goals. And single or coupled up, repairing one’s credit is always a financially wise idea.

There are tons of financially savvy ways to pay down your debts. It’s about finding what works for you. For couples, one of the best ways is to work with your partner work to pay off all debts and maintain low balances on credit cards. Ultimately, it’s a win-win because you’ll both be able to improve your credit. And let’s not forget, the better combined credit score you have, the easier it will be to reach the kind of financial goals and dreams that involve a credit check.

Read More: Paying Off Credit Debt Quickly is More Simple Than You’d Think

Combine: Car Insurance Payments

Male hands and car as protection of car concept

As it turns out, you could potentially save money by combining your car insurance with your partner’s. When you put two cars on one insurance policy, most companies offer discounted rates. Before you combine these expenses, know what your options are to truly make the most of them.

By combining your car insurance policies into one, you can save a sizable chunk of collective change. But don’t stop there. There are tons of interesting ways people save money on their car insurance out there. So do your research and find out all the ways you might already be paying more than you need to.

Per Value Penguin, “For most couples, it is cheaper to combine your car insurance into one joint policy when you’re married. If one spouse has an expensive car, a poor credit score, or marks on their driving record, rates on a joint insurance policy will likely be higher, but not nearly as high as if this spouse took out their own individual policy. And no matter what cars you drive or your respective credit scores and driving histories, insurers often offer a multi-car discount to policyholders who insure two cars under one policy.”

Combine: Some Investments

Female Couple At Home In Kitchen looking at device screen together

Some financial experts believe you’ll get more out of combining your investments. Others say it’s too risky. No matter what you and your partner decide, its decision should not be made lightly. Every couple’s financial situation is different. If you invest alongside one another, it’s possible that you’ll have greater returns someday. So there’s no denying that it could be a smart move.

Deciding whether it’s the right move for you and your partner by first assessing risk. And consider taking baby steps together into the stock market. Apps like Stash and Acorns can help you keep the risks low while investing as a team. For instance, you can buy small shares of big companies for as little as $1.

Read More: Smart Investing Tips That Don’t Involve GameStop (Or Any Meme Stocks)

Don’t Combine: Personal Savings

It goes without saying, have things for ourselves is healthy. Ask any relationship expert: maintaining a sense of autonomy in our intimate relationships is important. And our finances are not entirely excluded from that equation. With that in mind, here are some money conversations worth having before marriage.

No matter your relationships status, talking about money with your partner is healthy, important, and helpful. So get on the same page for a stronger next chapter. While it makes more sense to combine certain accounts, it’s important to have at least one savings account for yourself.

Just because you’re in a couple doesn’t mean that your individual financial desires, needs, goals, dreams, and plans all evaporate. You’re still you, after all. Remember, we should never underestimate the importance of self-care, and that always includes our financial well-being.

copy ripping paper down the middle with dollar sign on it

If there’s something you want to save for, consider doing so through a personal savings account. Not to mention, this financial space fully managed by you is also a great place to save up and buy something special for your sweetie. Having your own savings account can also prevent any joint savings account mishaps or misunderstandings where money is taken out that the other person had unmentioned plans for.

Depending on your situation, you might be better off separating more accounts than you combine. Perhaps the opposite is true. But no matter what you decide, it should be a decision you come to together. If your partner takes issue with you having a personal savings account, that may be another issue altogether. Having your own personal savings account is a healthy thing for you both.

With all of that said, you should still consider setting up joint savings accounts for anything you’re saving for together. Perhaps you want to build a joint travel fund and have an amount goal for each trip. No matter its purpose, creating a joint savings account in addition to your personal savings can serve as a means for helping each other stay financially accountable. And the more savings accounts you have collectively, the bigger your nest egg can grow.

Read More: How to Talk to Your Partner About Money

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