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Shared Money: Combining Finances With Your Partner

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Yesterday, I received a question from a reader, Lindsey. I’m not much of a fan of giving advice; there are professionals out there whose job is to provide sound financial advice. All I can offer is my opinion. Here is Lindsey’s question.

What should you do if you and your partner decide to combine finances (checking accounts, credit cards, leases, etc.), but you, in the past, have had very different personal finance personalities? I meticulously keep track of all my expenditures and income in a budget spreadsheet, I save all my receipts to check against my statements, at any given moment I can probably tell you how much money is in my different accounts and how much money I have left to spend in a certain area each month (or for the year for more irregular expenditures). I have an emergency savings fund, a Roth IRA, and a 401(k) through my employer. He basically lives paycheck to paycheck, has no savings, does not keep track of where his money is going, and has very little credit (which can be worse than bad credit!).

What do you recommend? Is there a way to responsibly consolidate, or perhaps a happy medium?

First of all, I don’t think it has to be a problem for two people in a committed relationship to have two opposing personalities when it comes to money management. What’s really important is the goal. If two people agree on some basic principles, there is room for differences in habits. In a partnership, there are ways each individual keeps the other in check and offers compromises.

In fact, when it comes to money management, a relationship in which one is meticulous about record keeping and the other has differing interests can be just as strong as a relationship in which both individuals think exactly alike; in fact, the varied relationship can prove to be more interesting. You’ve obviously decided that this is the right relationship for you despite some disagreements about money, but finances can still be successfully combined.

Don’t go into the fusing of your finances with the intent on changing his philosophy. It’s true that he will have to be willing to compromise on some issues, but most likely, you will be leading the charge. In compromising, you may also have to be willing to loosen your grip, but just a little bit.

He’s living paycheck to paycheck, and you’re not. In his situation, will he be contributing to your combined accounts? As you merge your finances, if you also combine your bills, you might find that the two of you are able to contribute more evenly to savings or bill payments. However, you should consider contributing only as your means allow rather than aiming for equity. For a simplified example, rather than both of you contributing $500 to the mortgage each month, contribute 10% of your respective salaries towards that bill.

You partner may find that the ease on his financial obligations will allow him to contribute to savings and a 401(k). From what you mentioned about his philosophy about money, you may have to inspire him to find an interest in long-term saving.

His bad credit is another issue. You may find it difficult to purchase a house together, if that is one of your plans for the future. You will have to decide, assuming this is an option for you, if you want to save money by keeping a mortgage solely in your name. The other option is to share ownership but possibly qualify only for a higher-interest mortgage due to this credit. You’ll have to run the numbers — as the financially astute half of the couple, this will be your job — and once you’ve run the numbers, you’ll have to decide whether the decision should be based solely on those numbers or if there are other variables that come into play.

The broad answer is that consolidating your finances can be accomplished, but varying philosophies and major differences in income can make the transition difficult. The two of you have already decided to combine finances, so at least you are on the same page in that respect. Whether to combine your finances or not is not the issue; you are past that point. Here are some thoughts.

What are your goals? Are you looking towards retirement with each other? If so, then saving for retirement must be a priority for both of you. Do you plan on having children? The two of you may not be able to contribute equally towards these goals. Your investment actions, including asset allocation and risk tolerance, should support your goals.

Which accounts should be combined? Any accounts you pay bills from can be combined, with each contributing the amount or percentage of their income that you decide is fair together. Any savings accounts for future couple-related goals, like purchasing a house, can be combined. Do you want to keep separate accounts for some fun money? Some couples do this and use their fun money to “surprise” the other with gifts or spend on singular indulgences.

Who will manage the money? This seems pretty obvious in your case, as you are the one with the interest and the skill in money management. I’ve heard that it’s best when only one individual in the couple tends to the details, so this is one aspect where your differing philosophies may work in your favor. The money manager should keep the other periodically (and briefly) informed of the financial state of the union. Even with one money manager, major financial decisions should be discussed together.

Be prepared for sacrifices and compromises. That probably goes without saying, as any relationship requires this. Money tends to amplify the issue. How will you handle disagreements?

What are your obligations? Mortgages or rent, phone bills, cable, and insurance are only the start. Will you be expected to take care of an aging relative? Does your partner have outstanding student loan debt, or will you be supporting him through medical school?

Personally, the most combining I’ve done is a combined savings account with my girlfriend that hardly receives contributions and is used to pay for vacations or other experiences we share. For example, when we sold our old college textbooks on, all the proceeds went to this joint account. We used several hundred dollars from the account to pay for our recent vacation to Boston. This is the limit of my personal experience.

Readers: do you have any suggestions for Lindsey? She and her partner have already decided to combine their finances. How can they do so with the difference in situations and philosophies?

Published or updated September 19, 2007.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 11 comments… read them below or add one }

avatar 1 Anonymous

Having seen this type of scenario play out in a family member, I would say that she is headed for trouble and frustration if they have such diametrical views on money and self-discipline.

When she’s trying to save, he’ll be out buying a motorcycle. She’s taking her lunch, and he’s going out with the guys every day. She wants to know where the $200 cash went, and his pockets and head are empty.

Good luck.

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avatar 2 Anonymous

The key is that partners come to an agreement and live by it. It might be that she spends less money than he does. But he has to agree not to spend beyond a certain point.

Mr. Micah is willing to lend a hand, but isn’t the sort of person to take initiative on working out budgets, repayment plans, whatnot. So I work them out and he agrees to them. I do my best to take his desires/needs into account and let him know that he can suggest changes. But I’m definitely the one who spends the most time on financial stuff.

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avatar 3 Anonymous

My husband and I are opposites. He’s very frugal and meticulous. I do like to save, but I’m definately a spender. My credit is fine and I pay my bills on time. From my perspectiv,e having a joint account has helped both of us.

For me I appreciate having a chunk taken from my paycheck and all the bills are automatically paid. It gives me some piece of mind. Since I work part-time (college student), I put in a 1/3 of my paycheck.

I also learn to curb my spending habit by checking with ING everyday and see the interest I’m earning.

We put money to pay bills in the joint account and keep individual accounts for other things. It’s a win-win situation.

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avatar 4 Anonymous

My husband and I are opposite when it comes to financial management. We both have great credit, healthy savings, etc. However, I’m anal-retentive when it comes to budgeting and tracking and he’s laissez-faire. We’ve both accomplished the same thing, just using a different method.

The solution for us (in terms of combining finances) is a joint account that we both contribute to and household bills are paid from. Each person can spend from their individual account as they see fit without any oversight from the other. Of course, there is no secrecy, just no oversight.

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avatar 5 Anonymous

suze orman has good advice and bad advice, but her advice on joint/relationship/money is very sound. check out her books for more details as she goes through it thoroughly.

basically, you take the gross amount each of you make, add together, figure out percentage of each. like say one makes 40k a yr and the other makes 60k. total is 100k and 40k’r can contribute 40% and 60k’r can contribute 60%. that way, each party is paying for expenses in an equitable way (if it was 50/50 and one person makes a lot less than the other, resentment can build as it’s not fair to the lesser paid’s pocketbook). my paramour and i use this method and contribute the figured out amount every month into a joint account from which our rent/food/utils get paid from. adjust when necessary, figure new %’s when either gets a raise or change of job/salary, regular salary–we don’t count gifts and stuff that’s one-time (but occasionally make extra contrib for personal excesses while shopping jointly)…. btw, we have separate accounts personally owned beyond the one joint acct between us.

* to do this, you also need to figure out how much you are likely to spend each month on rent/mortgage, food, utils, etc and add 10% (suze says to add a higher figure i think) since something always comes up. BUT you do want it to work out fairly closely in the long run (with no huge leftover amounts, or in the minus, etc).

it’s worked out very well for us and it’s been a few years now. i’d say our $-temperaments are more in the vicinity of yours. so we both contribute to keeping track (paramour usually enters transactions in record book; i do occasionally. i figure out our percentages and monthly payment amounts. he usually writes the rent checks; i set up several utils to come out of acct automatically….). i used to be more carefree about my paychecks many years ago, but am much better these days.

i have also read that even if one keeps track and does most of the ‘money business,’ the other needs to do it occasionally for both appreciation of the job and in case the other cannot do it for some reason, absent or etc. so that they both will really know what is going on with the finances.

seek lots of info on the subject and after digesting it all, tailor it to your situation. you might need to work out some tweaks along the way, too. finding a plan you both agree on is important!

good luck!
let us know later on how everything goes! :)

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avatar 6 Anonymous

meant to say, add “10 percent” to rent/mortg/food/utils monthly figure….


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avatar 7 Anonymous

I would suggest getting the book Smart Couples Finish Rich for him to read.

Bad credit doesn’t necessarily reflect future credit.

If he is intent on cleaning up his credit, then teach him about it. Teach him how long bad credit stay on his record and the value of managing his credit versus income/assets.

With a better idea of how long it takes to clean up his credit report/score, it may help him realize his goals for the future and work towards it. I had bad credit for a while but recently started working my way back and as a result, the years have passed quickly enough and my score is back up again and my bad credit history is slowly fading away, never to come back.

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avatar 8 Anonymous

Talk to your partner rather than talking to a pf blog. Really communication is lacking in most relationships where money is an issue. I find it interesting people can talk about their money issues and concerns with total strangers but not their partners/spouses etc. Money shouldn’t be any different than any other issue where view points differ.

my wife and are are a bit odd. She is the better saver, but doesn’t care about money and doesn’t want to do the finances. I have been historically bad at saving, but I’m the one who does the finances. Probably because after learning some hard lessons, I care about money now.

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avatar 9 Anonymous

Thanks so much for all the advice – I love hearing all of your different opinions to that we can figure out the best solution for us! Thanks!

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avatar 10 Anonymous

In my opinion, you should NEVER join your finances without a written contract, i.e. a marriage license. The real danger is that your partner will get bored with the relationship and wander off, and there will be no legal recourse. At least if a married person wanders off there is a legal remedy for the other spouse to split up assets and debts.

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avatar 11 Anonymous

Jeremy is on the right track, but you cannot assume that even a marriage certificate will protect you.

I have a friend who was married, but her husband was able to clean out not only their joint accounts, but also her individual accounts as well, plus their daughter’s college fund before he disappeared. In theory, this should not have been permitted, but he ended up with everything and left my friend and their daughter penniless.

You might wish to consult an attorney and find out ways to better protect yourself before marriage.

Prevention is always better than cure. If you don’t trust this man about finances, then perhaps you should think twice before combining your assets with his. But even if you keep them separate, that may not completely protect you from errors or deception on his part.

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