Finances for Couples | A Guide to Starting Off Right

by RJ

in Money Management

It took two hours to realize living with a girl was not like anything I had ever experienced. I think it was the purple loofah that I unpacked that caused this realization.

Other than the array of different shower products at my disposal, one of the biggest changes was financially.

Unfortunately, we never really talked about what we should do financially before moving in. We figured things out soon but took some bumps along the way.

The purpose of this post is explain how you can minimize the bumps you’re going to have financially when you move in with your significant other . I divided the post into two different parts:

  1. Answering the Big Question – Should Couples Combine Finances?
  2. How to Find a System that Works for You


Finances for Couples – Part # 1 – Should Couples Combine Finances?

Now that you share the same address, should you share the same bank accounts?

Personally, my wife and I combined our finances soon after we moved in together. After about a year of trial and error, we found a system that works.

I know other couples, who successfully manage to keep their finances separate. The system they have in place, works well for them.

There is no right or wrong answer.  As I will say throughout this post, take a trial and error approach. If something isn’t working, admit your mistakes and try something else.

In the following paragraphs, I will present the case for combining finances. I asked Kevin from Invest it Wisely, who choose not to combine finances with his significant other, to make the case for keeping things separate.

The Case for Combining Finances

Now that we shared a bathroom, I figure it was time to share finances. This was my rational to combining finances soon after moving in with my then fiancée, now wife.

There was an adjustment period at first (I was a control freak because I thought I knew everything. This is surprisingly easy to do, when your job involves thinking about money). But after a few months of working out a few kinks, i.e. a few conversations about my behavior, things have been working out well.

I enjoy the fact that we have total transparency over each other’s financial decisions. This causes me to think twice before another impulse purchase.

Another aspect that I enjoyed about combining our finances is that we get to set and work towards goals together. In November of 2011, our goal is to hike the Sacred Trail to Machu Picchu. Together, we laid out a savings plan to help us achieve this goal. The process of talking about our dreams, setting a goal, and holding each other accountable for that goal has brought us closer together.

There are some drawbacks to combining finances though. Including:

  • Adjustment Period – It took both of us time to get used to someone else spending our money.
  • Guilt – Say I spend a little too much money at one of the local establishments. Not only am I mad at myself, I also feel like I let my wife down.
  • Hiding Gifts – I have to go through a few loopholes every time I buy a gift for my wife because she has access to the credit card statement.

The Case for Separating Your Finances

Enter Kevin from the very good personal finance blog, Invest It Wisely.

I’ve been going out with my girlfriend for a bit more than six years now, but we’ve been living together only for about a year and a half. We both went to university to complete a bachelor’s degree, and graduated in the spring of 2008. We both found full-time work and moved in together sometime after that.

When we first moved in together, we did not combine any of our finances. There was no real reason to combine, since we both had our separate bills and income streams. We paid the rent together, but when it came to most other things we did not have any real arrangements in place.

There are many advantages to keeping things separate. Since we do not have many expenses in common other than rent and we both have a similar amount of income, we can each spend our own income as we see fit. Neither of us has to feel guilty or seek permission from the other partner before spending money, unless that decision will affect the other partner.

There are also some disadvantages as well. Since we both like to pull on the reins, we sometimes get into disagreements over what amount of spending is fair. Although we have separate finances, many items, such as food, are paid for in common, since we usually only go grocery shopping once. There can sometimes be disagreements over who will pay for what food, and on what food we should buy. I imagine that these kinds of disagreements can also arise even with shared finances, though. Having the finances separate means that one of us can say “Ok, I’ll buy this, even though you don’t agree, because I have the means to pay for it.”

I think at some point, as a couple does more and more together, some finances will naturally become shared simply because it makes more sense to do things that way. In a few months, we will be moving into a condo which we have purchased together. We will most likely have a joint checking account to account for the mortgage, taxes, and other shared expenses. We’ll have to agree on how much to spend should we want to pay down the mortgage faster, since it affects both of us equally.

Should we have kids down the road, I can imagine that we would be sharing finances many of those expenses, too.

My opinion is that if it doesn’t affect the other partner very much or if you recently moved in together, there is no need to rush to start sharing all of your finances. Over time, you will probably find that you will start sharing things naturally since it simply makes more sense to do things that way. There’s no need to hurry, so take your time, enjoy the relationship, and try not to stress out too much. :)

Exit Kevin and thank you!

Other Systems

Knowing that there isn’t one system that works for everyone, I asked a few bloggers from the Yakezie network to share how as a couple, they manage finances.

The Saved Quarter

“My husband and I don’t combine finances. I run our household on his paycheck, and while he technically has access to the joint account that household expenses are paid from, he doesn’t ever touch it. We both have personal accounts and my savings goal is being saved without him having input or access.

My dad’s advice on me getting married was “keep separate bank accounts.” It’s worked for my parents for 35 years!”

Wealth Informatics

“We have two paychecks, each goes to different purpose. We view it as one single bucket of money, but the “accounting” is all separate.

Each of us contribute a little to the single joint checking account for cash only purchases but everything else is separate. Separate bank accounts, 401ks, each of us contribute to savings for our common goals, each of us give to charity separately… It is not based on any percentage though. It’s not separate finances in a strict sense, we still view it as a combined finances, but when it comes to accounts, it is all clearly separate.”

Budgeting in the Fun Stuff

“My husband and I combine all of our money together and then pay our bills and sub-goals out of that mix.  Our checks are deposited into our brick and mortar bank.  Large chunks of those are automatically pulled into our ING checking account from there.  Our mortgage is paid with the leftovers in the physical bank and all our other bills are paid out of our ING checking.

On the 15th of every month, we take the big chunk of extra cash left in ING checking and dole it out into our ING Savings sub-accounts – emergency fund, tax account, investment account, auto and home account, vacation fund, and both of our fun money accounts.

Our fun money accounts are actually the only “separate” money we have and we discuss our purchases from there as well.  It’s just a way to keep our entertainment money separate from our savings cash and visible for budgeting purposes.  So far, our system allows us to pay our bills, hit our savings goals, and budget in the fun stuff along the way.”

Finances for Couples – Part # 2 – Finding a System that Works for Both of You

Whether you choose to combine your finances or not, you still need to develop a system for managing money. The following are the core principles to getting started. Feel free to make adjustments. What works for some couples as you saw, might not work for others.

Reveal Everything

The first step is to not hold anything back. Reveal every financial account you have. Including that debt or investment you’re embarrassed to talk about.

This is true for people who are and are not combining. It’s important from the start to base your system on total transparency. It’s the only way things are going to work out.

Set financial goals

Personal finance gives you the chance to work together towards a goal.

For some couples who are just moving in, you could be saving for a wedding or debt payoff. Others could be saving for dream vacation, kids, or early retirement.

No matter your goals, come up with shared goals and start saving for them. For more on how to set up a system for your financial goals, grab a free copy of the Financial Freedom Blueprint.

Lay the ground rules

While you’re level headed; take the time to make a few ground rules about spending money. For example, one rule that my wife and I have is that we can’t spend over $100 on one purchase without asking one another.

Another rule we have is that each of us get $100 to spend on anything we would like. Since we both contribute, it’s important that we both get our share of freedom.

Delegate certain financial tasks (paying bills, tracking expenses, rebalancing, etc…)

Make three separate lists of what needs to be handled on a day-to-day, month-to-month, and year-to-year basis. Now, delegate who is responsible for what.

Keep things as straightforward as possible. This way, if a mistake is made (which they will be starting out) you’re not blaming each other.

Schedule a time once a month to review your finances and goals

The reason why money causes so many problems in relationships is that people tend to hold issues in far too long. Then, once they financially decide to let loose, they rage as if their mom just took away their Warcraft account.

The most important thing going forward is to keep communication lines open. There are going to be problems going forward. It’s going to take many months to fine tune a system that works for you.

Once a month, have a 30 minute talk about what is and what’s not working. If something is working, keep it in your system. If something’s not right, talk about how you can change it.

In a perfect world, you’re going to be living with your significant other for the rest of your life. This means, you don’t have to be in such a rush to get things right the first time through.

It’s important that you both take on a trial and error approach. With patience and open communication, I promise you will get there.


Photo by: Mando2003US

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Invest It WiselyNo Gravatar November 17, 2010 at 3:46 pm

Great post! I also like how you included feedback from the blogger community and worked that into the post. Thanks for including mine! :)

Briana @ GBRNo Gravatar November 17, 2010 at 5:28 pm

When my now fiance and I first moved in together, we immediately got a joint checking/savings account strictly for paying the rent. We would put a set amount into it and write checks to pay for our apartment. Some bills included both of our names while others included on or the other. I’ve assumed the role of CFO in our household. We definitely ran into some speed bumps in the beginning, but for the most part, our finances have been relatively separate. We have separate checking and savings accounts, but now since we’re getting married, we’re going to have a talk about combining our money into one account. Could definitely be a lot easier, as long as we budget accordingly and keep the line of communications open. Then again, we’re at the “if-it-aint-broke-don’t-fix-it” spot right now, and maybe we shouldn’t change how it’s working. We’ll see after the conversation is had.

SamNo Gravatar November 18, 2010 at 9:53 am


A fantastic post with some great perspective! I will certainly highlight this post in my next wrap when I return from vacay (typing on a friend’s fon now).

I think a great solution is to employ both to allow for freedom and shared goals. Have the big “where do you want to be talk” and go from there!

NYGUYNo Gravatar November 18, 2010 at 2:33 pm

I’m living with the GF and we keep everything separate. We’ve found it easier to break down expenses into categories and either 50/50 share the expense, or trade off paying for one expense for another. Anything left after living expenses in the month, is your own money and to do as you wish. Maybe this works for us now, because just living together we haven’t had to set many goals together. I make more income, therefore I put it on myself to save for big expenses like wedding, home purchase and vacations and paying for nights out to dinner,

An example of how we trade off responsibilities is we split the utilities bill 50/50 but I pay more of the rent and pay the cable 100% and in exchange she pays 100% towards groceries, toiletries and home goods.

I think combining finances would put more strain on ‘being told’ what to do and what you can spend on. I’m not very good at not judging and it’s hard for me to understand spending $150 on a brand new dress just for a friends engagement party, and I’m sure it’s hard for her to understand me spending $150 on weight lighting supplements like protein shakes, and multivitamins It would be hard to leave judgment out of each others spending habits.

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