Once upon a time, it was expected that couples would join their finances when they got married. Only a little more than half a century ago, it wasn’t so unusual for the husband to be the main earner and for women to give up work once they had a child.
But these days, things are very different.
Women have equal or in many cases, more established careers than their husbands, couples are moving in together and sharing expenses before getting married and many couples are skipping marriage altogether.
All of these things can make navigating finances as a couple that little bit more complicated.
For those thinking about merging their finances for the first time, or wondering whether they have to merge their finances at all, we have the answers you need.
Below, Nicole Haddow, author of Couple Goals: Building A Strong Financial Future And An Even Better Relationship, answers everything you need to about merging money with a partner.
Is There A Right Time For Couples To Think About Joining Finances?
Every couple is different when it comes to finances and there are plenty of reasons you might decide to merge your money sooner or later than someone else does.
“The stage at which couples merge finances can vary depending on each individual scenario,” Nicole explains, “But often, opening a joint account may occur when couples move in together, because they’ll have shared costs such as rent or a mortgage, along with the cost of utilities and shared meals.”
What Nicole emphasises however, is that you shouldn’t feel rushed to join your finances.
“If your partner is pressuring you to merge your finances early that could be a warning sign that something’s not right,” Nicole says.
What Conversations Should Couples Have Before Joining Their Finances?
If you are thinking about taking the next big (financial) step with your partner then there a few conversations worth having before making the final decision.
Nicole believes that you should be having open and transparent conversations around money and spending before leaping into anything.
“You need strong levels of trust and accountability from both parties regarding shared expenses,” Nicole explains. “Ideally, you’ll also have discussed your values with regard to spending, saving and investing.”
When it comes down to actually opening a joint account, Nicole says to make sure you’re both on the same page about how the money is going to be managed.
“If you open a joint account and someone is misusing funds, that will likely lead to conflict in your relationship,” Nicole notes.
To mitigate this, some couples may decide to split costs based on a percentage of their income.
“What is important is ensuring that both people feel the arrangement is fair,” Nicole says.
“Talking regularly about expenses, goals and long-term aspirations with respect and honesty is the first step in making sure that merging finances is the right thing for your relationship.”
Do You Have To Join Your Finances When You Get Married?
These days, there’s no pressure to join your finances just because you’re getting married.
“There is little difference between a married couple and a de-facto couple,” Nicole points out. “You qualify as a de-facto couple if you live together for two years or more.”
If you’re not quite comfortable with joining your finances in the early stages of marriage, there’s also nothing stopping you from merging them down the track–if you decide you want to.
What Are The Benefits Of Joining Finances With A Partner?
While you never have to join finances if you don’t have to, Nicole believes there are actually some benefits to sharing money with a long-term partner.
Nicole believes that taking charge of your financial situation together can provide a valuable “sense of equality and empowerment for both people.”
“If you focus on pooling some of your resources, this removes the focus on individual incomes and reduces the potential for one person to hold financial power over the other,” Nicole says.
“A shared cashflow helps you work out what you bring in as a team, pay for shared expenses together and put surplus funds towards goals.”
It’s also important to note that you don’t have to merge all of your finances.
“A joint account can also help to balance the mental load of household accounting but maintaining at least one personal account is good for your independence and prevents you from becoming entirely financially enmeshed.”
Nicole warns that “complete financial enmeshment” can lead to a reduced sense of independence and a lack of intimacy between partners.
According to Nicole, the way you share your finances (joint, hybrid or separate) is actually less important than the way you communicate about your financial situation.
“Both people should be equally committed to building a strong financial future,” Nicole says.
Is There Anything Women Should Do To Protect Themselves Before Joining Finances?
Nicole says that experts will always recommend women keep a personal emergency fund that allows them to leave a relationship that becomes abusive or unsafe.
However, Nicole believes that staying engaged in your shared expenses is an equally powerful tool.
“That means that you don’t avoid the responsibility associated with household finances. You need to know how much it costs to live your life together, what income goes in, what goes out and how to log into all of your shared accounts.”
Nicole continues, “building and maintaining your financial literacy is just as important as having an account that allows you to leave a relationship.”
If you want to read more of Nicole’s financial wisdom then you can buy her new book about managing your finances in a relationship.
Buy Couple Goals: Building a strong financial future and an even better relationship at Booktopia.