When you’re in love, you may feel like your relationship is invincible. As you commingle hobbies, friends, routines and families, you’ll start wondering about combining finances. Is it right for you?
While it’s good to pause and think before mixing money, don’t stress. Instead, consider the pros and cons so you can decide one way or another.
The Pros of Combining Finances
When you combine accounts, you’ll enjoy multiple benefits as a couple. Here are a few to get started:
- One bill instead of two: Some recurring payments can be condensed as soon as you sync up.
- A renewed sense of togetherness: Financially, it feels good to know someone is there with you. Couples with joint bank accounts report higher levels of relationship satisfaction, according to a study in FamilyRelations.
- Higher returns: Interest rates will work in your favor if you’re saving and investing together. When borrowing, you’ll also have more in the bank to show lenders your creditworthiness.
- Help with cost-cutting moves: There may be places in your budget where you struggle not to splurge. Your partner may be able to help offset this. For example, if you hate cooking but your partner loves to flex his or her culinary muscles, your pocketbook will enjoy less stress from dinners out once you merge.
- Simplification: There’s something to be said for the simplicity of becoming one financial unit. The time you used to spend calculating who owes whom can be used for other pursuits.
The Cons of Combining Finances
Once you combine finances with a partner, their financial habits become yours. If your partner is a compulsive shopper, refuses to budget, regularly splurges or otherwise can’t manage money, now you can’t manage your money either. Before combining finances, make sure you know and are comfortable with your partner’s money habits.
There may also be issues if there is a large discrepancy in income between you and your partner. The main breadwinner may be perceived as having more influence in the relationship, which can lead to resentment.
Perhaps the biggest reason people fear combining finances is the concern that, should the relationship end, it would be difficult to untangle. Breakups can be messy and there’s no safe bet when pooling your finances. Carefully assess your partner’s maturity level before taking the plunge.
Consider Your Future
It may come as no surprise to you that money is the number one cause of friction in a relationship, as noted by Investopedia. But what may surprise you is that there are a number of simple things you and your partner can do to avoid stress when combining finances. To get started, try this guide from HERMONEY.