Combining Finances With Your Partner? A 7-Step Guide

The rules have changed. The days of men-as-the-only-breadwinners are over and there's a lot more non-traditional relationships, cohabitation and “it’s complicated.” No matter what stage of relationship you’re in, talking about money, early and often, is critical to your long-term success as partners. A survey by TDBank founds that 74% of millennials discuss financial matters weekly, and they’re happier in their relationship as a result.

The truth is, discussing money with your significant other can be hard, especially if your finances aren’t as great or as straightforward as you’d like them to be. I still remember the day I started to share my financial details with my husband-to-be, wondering if it would impact our relationship in some way. Instead, that awkward conversation became productive — helping us have many more conversations about finances in a more transparent and honest way as our relationship evolved.

The number one question we get from couples is about how they should merge their finances. Should they go all in or keep things totally separate? Should they plan for the best case scenario or the worst? How do other people do it?

Based on our research, we’ve developed this guide to combining your financesto help you get started.

Who is this guide for?

This guide is targeted at couples who are just moved-in together or are recently engaged. We’ve also heard from many married couples that found this exercise beneficial.

Guide to combining finances as a couple:

1. Start with your money personality. Your money personality is exactly what it sounds like — an analysis of your relationship with money. What’s most interesting is comparing your personality with your partner so you can better understand the differences in your approach. It’s likely that you’ll have different personalities (remember how opposites attract?), and therefore different approaches when dealing with money. Interestingly, couples with similar money personalities when they first start dating will actually change over time so that they’re less similar.

One of the best money personality tools I’ve seen out there is Olivia Mellan’s Money Harmony quiz. It’s short, it’s free, and she has a book you can buy if you want to dig into your personalities further. We’ve included some discussion questions in the Combining Finances Guide to talk through once you’ve gone through the quiz.

2. Cut the noise, focus on the important stuff. Once you have a better understanding of you and your partner’s relationship with money, it’s much easier to have a conversation about what’s working or not working. Take a moment to talk through the questions listed in the guide. Then jot down what’s working or not for each of you. These will give you the areas you need to focus on when selecting the right model for yourselves later in the guide.
3. Be transparent about your finances with your partner. A big step to combining your finances is being clear with your partner on what your personal financial situation is. This can be a tough conversation, as one of you might be in a totally different place than the other. But the fact is, this is an important step in bringing your finances closer together, even if you’re not married.

According to an Experian report, 59% of divorced adults attribute their divorce (in some part) to financial issues — so the consequences of not doing so are very real. We suggest starting with calculating and then sharing your net worth, which looks at your assets (everything you own) and your liabilities (everything you owe).

Pro-tip: You can easily pull this information together on Zeta. Once you’ve got this high-level view of your finances, you should also cover your overall income and even your credit score. These three financial indicators will give both people a good understanding of the financial footing you’re on.

4. To merge or not to merge? Consider all the previous steps in this guide as research — learning about each of your personalities and finances so you can make an informed decision about which merging model to use. Now, you’re ready to dig into three main ways couples’ might manage their money. Interestingly, our generation (millennials) is much less likely to combine our finances fully, a stark departure from that of our parents’ generation.

To help you consider each model carefully, I’ve listed them out in the Combining Finances Guide, along with a practical steps on how to implement each model.

5. "What if you earn more than me?" If you have very different incomes levels, it can create some really tough dynamics in your relationship. The antidote is to talk through your differences and co-select the model that you each think is fair. I’ve outlined 3 approaches for dealing with varied incomes here.
6. Select a merging model. The good news is that you’ve done the leg work to inform your decision; now it’s just a matter of choosing which model to begin with! A note to keep in mind — the model you select for your finances might change as your relationship evolves. Don’t stress too much about making the right decision now. Rather, start with something that brings you closer to each of your ideals. You can adapt your model as your life circumstances change.
7. EXTRA CREDIT: Define your short-, medium-, and long-term goals together. Combining your finances is really a means to an end, with the end being the goals and aspirations you have as individuals and as a couple. Bookending your conversation with a broader exercise defining and sharing your goals can really put things into perspective.

For example, my husband and I choose not to fully integrate our finances as we each have very different risk appetites. When I shared some of the investment goals I have for the near-future, it made it clear to us that keeping our money separate would give me the financial freedom to pursue those goals without making him feel like he’d have to come along for the ride.

My own financial journey led me to found Zeta, a free tool focused on helping couples navigate their finances together. We’ve spent countless hours talking to couples and financial advisors about what works or doesn’t.

Thanks to Jessica Skeete and Gordon Macrae.