We hear of many people moving in together, getting married, or just generally managing to live their lives as a team.

At first, there were all the interesting discussions about where to live and how to split the weekend cleaning up.

But soon enough, the topic of money comes up.

And managing your finances as an adult with another person is one of the biggest adulting tasks of them all.

It requires a great deal of transparency, patience, and a willingness to discuss the ‘scary’ goals of both partners.

Money management as a couple can bring about so many mixed emotions.

Yes, there’s the benefit of convenience, and having a partner to share financial responsibilities with.

But having to merge finances can also give the feeling of losing independence, and having the potential for quiet resentment when unspoken expectations aren’t met.

Most couples would agree that it’s a delicate balance, and we all fear losing our footing at some point or another.

Navigating this path doesn’t have to be stressful.

We discuss financial planning for couples and show that with the right mindset and practice, combining your finances can bring unity and make it easier to reach financial goals.

Understanding Your Financial Dynamics

Your individual financial habits and money values could play a large role in the financial decisions that you and your partner will make.

The way that you and your partner view and spend money can affect how you decide to handle your finances together.

It helps to understand each other’s spending habits and why you spend your money the way that you do.

Most financial habits are learned when people are young, such as saving for retirement or paying off debt.

The values that you bring to your spending habits can affect how you handle finances with your partner.

For example, one person may be a natural saver and feel uncomfortable with little to no money in their bank account, while the other partner may view money as a way to enjoy life now and spend it on experiences.

Neither is more right than the other, but they can create problems when merged.

Communication can help overcome many problems, but the first step is to understand the other person’s perspective on how they view and handle spending money.

By laying out the financial details of each person’s financial habits, it will allow the two of you to come up with a plan that will work for both parties.

While discussing each other’s spending habits can be awkward at first, it is crucial to gaining insight into what makes the other person tick financially.

This is especially true if you have been dating for a while.

You should already have an idea of each other’s spending habits.

But by actually laying out the specifics, it will allow for a much more realistic financial plan to be put into place.

This is not to say that one person is better than the other, but rather that by understanding the reasons behind the financial habits of the other person, a plan can be put into place that will allow for the growth of both individuals.

Choosing the Right Structure for Your Goals

When it comes to managing your finances as a couple, there is no right or wrong way to do things.

Everyone is different, and what your friends are doing for managing their finances as a couple might not be suitable for you and your partner.

The key is to find a structure that feels fair and works for both of you.

The Full Merge: All of your money is put into a single account, and all of your spending and saving (and everything else) is done from that account.

The biggest advantage of this approach is that it makes everything extremely easy to keep track of. It can be a very powerful way to build up a lot of trust with your partner.

But it can be difficult to maintain if you have very different spending habits.

The Hybrid Model: Each individual has their own checking account to handle their personal spending, while a shared account is utilized to pay for joint expenses such as the rent for your home, utility bills, the cost of the groceries, or to work towards your financial goals as a couple.

This can be accomplished by each partner depositing the same amount of money every month, or by each person contributing a percentage of their individual income to your joint account.

The Proportional Split: In cases where there is a significant difference in income between the two partners, contributing a set amount to joint expenses every month could end up being unfair for the partner with the lower income.

A more equal approach would be for both to contribute a percentage of their earnings towards the shared expenses for their joint living and savings goals.

This way, both will have enough to cover their personal living expenses and to keep for personal discretionary spending.

Setting Up Your Shared Account

Once you have decided on the type of shared account that is right for you and your partner, the next step is to set up the account itself.

You will learn how to open a joint bank account together and set up the ground rules for how you will use your shared funds.

How will you establish ground rules for your new joint bank account? Once you have decided on a structure for your joint accounts, it is time to set up your first account together.

Make sure to have all of your identification, Social Security numbers, and current proof of address available.

When opening a joint bank account with both of your names on it, you are establishing a bank account with joint ownership.

This means that both of you will have full visibility into all of the activity in the account. It is very important to establish ground rules for your joint account.

You should discuss before you open the account online what your ground rules will be for using the shared money in the account.

For example, you may agree that any purchase over a certain amount of money will require a check-in with the other person before making the purchase with the money in the shared account.

Establishing a Consistent Communication Routine

As your life changes, so do your finances.

To continue using your shared financial system in a manner that benefits you both, it is necessary to assess and make changes as needed regularly.

This can be as simple as reviewing where your money has been going for the past month and discussing how you can continue to save and spend together within your shared budget.

Schedule a regular time to assess your shared finances, make changes and grow as a couple.

Schedule a monthly ‘money date’ (keep it casual and stress-free – i.e. over coffee).

On this date you will review recent expenses and jointly discuss and update your shared budget (and any individual budgets) in light of changing goals, altered income and various other factors that will necessarily affect your shared spending plan.

Life is unpredictable. So too will be your spending.

However, tracking your spending and jointly regularly neutrally discussing your finances will allow you to adapt and avoid letting minor issues develop into disputes easily.

Protecting Personal Independence

The point of all of this is to be able to have balance in your life and have your own individuality.

That means having some money to spend that your partner does not have to approve of.

When you are going to buy a gift for your partner, it can be nice to surprise them.

If you have a joint budget, then your partner would find out how you spent every dollar before you even made the purchase.

Also, having your own money allows you to have your own hobbies and things to do in life.

You do not have to be responsible for your partner’s spending, and they do not have to be responsible for yours. That is just fair.

And that balance makes all the difference.

Respect for Personal Autonomy: Why Merge?

The hybrid approach described above can also serve as the basis for a completely merged budget.

The important thing to remember is that there is no rule saying that a merged budget means that you can’t have any personal freedom.

The key is to be fair and respectful of each other’s individuality.

This can be done by setting up a personal allowance for each partner in the budget.

Moving Forward as a Team

Ultimately, merging your finances is about building a financial system to support your future together.

It’s a real way to put your partnership into practice by dealing with difficulties, planning for the future, and supporting each other through all of life’s ups and downs.

By beginning to merge your finances in a way that’s suitable for you both and continuing to communicate effectively about how you’re doing, you can create a system that brings you both peace of mind and financial security in the long term.