When Should I Combine Finances With My Partner?

Adult couple working on finances

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When you are in a serious relationship, you may be wondering about combining your finances. There are many steps or milestones in a relationship—whether it's moving in together, getting engaged, getting married, or having a child—where people may consider combining their finances. There are laws set up to protect you once you are married, so it is usually best to wait until you are married to fully combine your finances. Otherwise, you may find yourself in a difficult situation and can end up being hurt financially.

What to Do If You Move in Together

If you are living together, it makes sense to combine household expenses and cover them together. The best way to do this is to set up a household budget. This budget will cover things such as your rent, utilities, food, and other expenses that you share. Other items, such as your car loan, insurance, and retirement, should be kept separate from each other. Money that you spend on clothing and personal entertainment should also remain separate. This allows you to protect your credit and retirement and work on the personal goals that you have.

Since it is rare that a couple makes the same amount, it is better to allocate your shared expenses based on the percentage of income you contribute to the relationship, rather than by equal amounts.

Sharing Budget by Income Percentage

The following example illustrates how you can share your budgeted expenses based on income percentage.

  • Your household budget is $2,000 a month,
  • You make $2,500 a month and your partner makes $3,000 a month, making your income share 45% and your partner's $55%.
  • You would then pay $900 (45%) of the total household budget. Your partner would pay $1,100 (55%).

What If You Are Engaged?

Getting engaged is a big step and it shows that you are committed to each other. However, it does not offer any additional protection under the law. If you do become engaged, it is best to wait until you are married to combine your finances completely. However, if you are living together, you can combine your household expenses just as in the example above. This is also a good time to combine some additional expenses as you prepare for marriage, such as signing a new lease.

What If You Have Children Together?

The best way to deal with this is to put all of the child-related expenses into your household budget. This includes health insurance, childcare, and clothing for the child. Then determine how much you each need to contribute in order to cover the household expenses. If you break up, you can still have help covering the expenses through child support. You will need to talk to a lawyer to set this up. Some states also offer help for this through their children's or family services department.

If one of you stays home with the kids, then you need to talk about combining everything. Without the protection provided under marriage, the partner that stays home will not have any right to the retirement benefits. You will also need to include ​retirement savings for the stay-at-home parent in the budget. It may be beneficial to consider getting married at this point.

What If You Want to Buy a House Together?

This can be extremely complicated. It is possible to buy a house together before you are married, but it needs to be done in a way that is fair to both of you. You will need to draw up a contract that divides up the value of the home between the two of you. If one of you provides the down payment, then it may make sense for that person to own slightly more than 50%. You should visit a lawyer to have this worked out correctly so that, if you decide to split up, one of you will not be in a worse position financially.

What If Your Spouse or Partner Does Not Want to Combine?

If your spouse or partner does not want to combine finances at all, you may be in a difficult situation. If you are living together, then you will need to at least combine household expenses. You can open up a separate checking account that you both put money in and work from there. If your partner is not willing to do that, it may be best not to live together.

It is important to realize that your partner may have legitimate reasons to be reluctant to merge finances. These might include financial issues in previous relationships or concerns over your financial habits. However, to be fair, shared expenses should be shared. If your spouse will not combine finances, it may be a major sign that there are financial issues in your relationship. You may need to see a marriage counselor to work through the issues together.

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  1. Nolo. "Legal Issues When an Unmarried Couple Breaks Up."

  2. U.S. Office of Child Support Enforcement. "State Agencies."

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