7 Tips for Pooling Money with Your Partner
Relationships come in many forms and in many ways.
From marriage to cohabitation to long-distance relationships, there is no one-size-fits-all approach when it comes to how you choose to move forward with your partner.
So why should pooling your finances be any different?
In the past, there have been clear social pressures about what the “perfect” American dream looks like. It included settling down, having children, owning a house with a well-maintained yard with a white picket fence, and keeping a joint bank account together. If this is what you want, more power to you!
But if you want something more flexible for your needs, that’s fine, too.
The truth is that there is no right or wrong way when it comes to consolidating your finances. Every couple has their needs – and that’s okay!
However, it cannot be denied that money matters are one of them top reasons for divorce and separation.
While there is no exact guide to follow for pooling funds, there are a few principles that can make the process easier. It doesn’t matter if you plan to marry or live together with your lover. The best part? These terms do not only apply to finance. They can make other areas of your relationship stronger!
So what are these tips for combining finances with your partner?
Let’s take a closer look below.
How to Combine Finances as a Couple
It is easier to combine your finances if each of you knows your budget. So before you start this process, make sure each partner has a budget. Without knowing the salary and expenses of each partner, all you are trying to do will be guessing and guessing.
At the very least, have a list of your income, expenses, bank accounts, credit cards, investment accounts, and anything else related to your finances.
Once your list is in order, consider the following tips:
Create ground rules together.
It’s important to be upfront, transparent, and open as much as possible. As a couple, the two of you are a team. Withholding information or trying to hide something from your partner (such as a debt), will undermine what you are trying to achieve. This system will protect you by ensuring that both parties are on the same page.
So what ground rules do you want to establish?
First, answer the question: How do you want to “combine”? Is it all shared – as in shared bank accounts and investment accounts? Or are you simply consolidating finances by splitting debts and splitting financial obligations?
Again, there is no right or wrong way to do this. Each couple has their own importance, so the main goal is to make sure you are on the same page. In other words, create your own financial rules and stick to them.
Remember, you can revisit this in the future. No relationship is static, and neither should your financial plan be.
Avoid any judgment.
When you choose to love a partner, you choose everything that comes with him, even the burden. In some cases, this can include debt. Maybe it’s student loan debt or credit card debt. It doesn’t matter what the situation is. When you commit to balancing your finances, make sure you create a judgment-free environment.
Judgment can lead to struggles down the road, such as one partner feeling like they need to hide things in the future.
To avoid judgment, try to think about finances from a neutral perspective. Remove the emotional element and focus on the numbers If someone is in debt, that’s what it is. There is no need to try to make them feel ashamed of any previous decisions. Rather, this is about moving forward together as a team. Talk about how you can overcome these financial constraints by making a budget together and sticking to it.
Take it one step at a time.
Rome wasn’t built in a day, and consolidating your finances doesn’t have to happen in a day.
These conversations can take place over the course of several days – or weeks or months.
To avoid repeating the same problems over and over again, consider creating a specific goal for each discussion. For example, you can make your first meeting about talking about any debts you both have. The next meeting can be about your future financial goals, both short-term and long-term. etc.
Finance is such a big topic that it helps to break it down into smaller, digestible chunks.
This can also help prevent any feelings of frustration. Remember, there is no rush. Take things at a pace that is comfortable for you and your partner. Move as fast or as slow as you need.
Always protect yourself.
Don’t rush into something if you’re not ready. If you feel pressured to pool your finances because of your partner or because of social pressure, it’s probably not the right time. Proceed only when you are ready.
Self-defense is not about having a “backup plan” or an “escape plan.”
Rather, it is about emotional self-defense. A healthy relationship is one where both parties feel supported, heard, and valued. If you don’t feel supported while balancing your finances, that could be a possible indicator of other problems in your relationship.
If your partner is ready to coordinate the finances but you are not, that’s fine. Talk about your feelings and put this aside until you are both on the same page.
Create a budget together.
Once you’re both on the same page, it’s time to create a budget.
How much money do you earn in partnership? And how do you want to split the costs? Are you going to split everything down the middle – 50/50? Or will you split the expenses based on your income? Are you going to combine your bank accounts and pay everything together through a joint account?
Really take the time to talk about your budget.
During this process, think about more than just numbers. Emotions are also important during this process, and it is important to deal with any emotions now rather than allowing resentment to build. For example, splitting costs 50/50 may seem like the most reasonable solution. But unless you both earn exactly the same amount, a 50/50 split means that one party will pay a higher percentage of their income to cover expenses.
This can lead to hurt feelings. That doesn’t mean a 50/50 split is wrong. However, you will want to settle on a budget that is fair, feasible, and acceptable to all parties involved.
Talk about your long-term goals.
If you combine your finances, it means that you are clearly committed to your relationship. This means it’s time to start talking about what you both have in mind for your future.
Long-term financial goals can include: Buying a house together, saving for a luxury vacation, starting a college fund for your children, saving for retirement, etc.
In other words, if you’ve been saving for your future as an individual, you should definitely save together as a couple!
Always check in with each other.
Finance is not a set-it-and-forget-it type of deal.
People change and goals change. The economy is changing. Jobs, income, and expenses all change.
At the very least, consider reviewing your budget together at least once a month. This will keep you both on the same page and help prevent any unexpected surprises. Again, it all comes down to opening up and communicating freely with each other! It may not be the most fun thing in the world to talk about business and handle the finances around the house, but it’s key to keeping everything organized!
The Bottom Line
At the end of the day, your finances as a couple are an extension of your relationship. Just as you want transparency and cooperation in your relationship, you should prioritize these goals in your financial life together.
Do you want to connect with other couples who are going through the same situation? Do you want to hear how others have faced this challenge in their lives?
Then I encourage you to join The TBM family on Facebook. It is a great place to connect with people from all walks of life. You never know how new ideas can shape yours!
