How to combine finances as a couple

Close up of heterosexual couple holding hands

Talking about money is often awkward in relationships, and one big decision for couples can be whether and how to combine their finances.

How to approach combining finances

Combining finances with your other half can be a difficult task, but if approached in the right way it doesn’t need to be stressful or overwhelming. 

Communicate and be open

Bringing your financial health out into the open – whether this is savings, debts, income, or expenses – is a great place to start. Although being open and honest about your finances is sometimes easier said than done, it can play a crucial role in building and maintaining a healthy relationship.

Establish a budget

Creating a realistic budget will help you manage your finances more effectively. The budget you set out should include everything from fixed expenses, such as rent and bills, to joint expenditures, such as holidays and nights out.

We all want to maintain a little freedom, however, so allocate individual spending allowances or money that you can spend without affecting any other finances. 

Creating a realistic budget will help you manage your finances more effectively.

Set out your financial goals

What do you want to achieve in the future? Whether it’s retiring at 60 or paying off your mortgage within 10 years, setting financial goals together could not only make these easier to achieve but could also help you talk about money more openly and honestly.

Ways of combining finances

When combining finances, there is no right or wrong way – how you choose to do it should be based on what works best for you and your partner’s financial situation.

You may already have a method of managing money that works for you, however below are four options for you to consider.

What’s mine is yours

This approach involves combining all accounts, and both you and your partner have an equal say in how you manage your finances. While this option displays trust, it also requires you to be completely honest about how you feel money should be spent and saved.

Meet halfway

This method involves you and your partner keeping your finances separate, except for one joint account. You both contribute an equal amount to this and pay your communal expenses from it.

Dependent on income

This approach is very similar to the one above, except that, rather than contributing an equal amount, you agree to pay a proportion of your salary to the joint account. For example, you each contribute 60% of your take-home pay to cover joint expenses, and any remaining money is left for yourself.

Each to their own

If you want to maintain complete independence over your finances, this is probably the option for you. When deciding to keep finances separate, it's worth discussing who'll cover certain expenses – for example, you may oversee paying rent, while your partner covers food shopping, bills and vehicle maintenance costs.

In any relationship, being on the same page about finances is vital. It’s important, however, to remember to take your time and only do what you feel comfortable with when it comes to combining finances.

Opening a joint account

A joint account can make paying for bills or funding holidays much easier. However, there are a few things you must know before deciding to open one.

  1. Joint account balances are accessible to both parties, meaning that even if one person deposits more money into it, you both have equal rights to withdraw it.
  2. You’ll become financially attached to whoever you open the joint account with, which affects your credit rating. If your partner has a poor credit score, it’ll likely negatively impact yours.
  3. If the account is overdrawn, you’re both liable for the payments.

For many couples, a joint account makes sense and means organising their finances easier. However, there are risks attached, so make sure you’re comfortable with them before heading to the bank.