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‘I Don’t…Want to Pay for That!': Tips for Managing Finances With a Significant Other Before Marriage

Combining finances with an unmarried partner is tricky, but honestly and a plan will make it easier.

Ah, the thrills of dating and new relationships. Movie nights, ice cream dates, walks on the beach, a romantic candlelit dinner on Saturday night followed by…

…a $150 bill!

If you’ve dated — even for a short time — you know that dating involves spending money. And, if you’ve been in a long-term relationship, you know that splitting the check at dinner is just the beginning. One date leads to frequent nights out which may someday lead to splitting the rent.

Although deciding how to manage money as a married couple is usually a daunting decision for newlyweds, smart couples won’t wait until marriage to discuss finances. Indeed, if you’ve been living together for two years and have no idea what’s on your sweetheart’s credit report, you should probably get on that.

Our couple’s money conversation guide can help.

What we’ve found is that money management for unmarried couples always seems to bring up questions in these areas: handling joint expenses, learning to live with a partner’s opposite personality, discussing money, and saving for goals.

We reached out to our focus group to get your thoughts on these issues and will do our best to give you some answers.

How should you split joint expenses with your significant other?

When we asked our focus group how they divided expenses with their main squeeze, here’s what they said:

  • 41% said they split expenses 50/50.
  • 40% said they paid for things in proportion to their income.
  • 17% said they don’t have a system for paying for joint expenses – they just deal with them as they come up.
  • Finally, a lucky (or unlucky, depending on which person you are) 2% said that one person pays for everything.

As you can see, different people have their own ways of divvying up the costs. Like with all money  matters, it comes down to communication and compromise with your partner and deciding what works best for you.

No matter how you decide to divide expenses, it usually helps to write it down and keep track of who is in charge of what (especially if you’re living together and/or using various percentages if you’re not splitting 50/50). It’s not the most romantic thing in the world, but keeping a record usually helps prevents arguments down the road, which are even less romantic.

And since it helps to know what other people in your situation are doing to track joint expenses, here’s what our focus group said:

  • 36% take the traditional money management route with a spreadsheet or pen and paper.
  • A whopping 53% have no system at all.
  • The rest – about 17% – shared a joint checking account to pay for joint expenses.

Again, there’s no right or wrong answer here. What works best for you might not work best for another couple. My husband and I generally split things down the middle when we were dating, but we still tried to treat each other to special dates throughout the year when we didn’t split the bill. I think that preserved the romance in our long-term relationship – especially when I was the one being treated…

Should you combine finances before marriage?

Okay, big disclaimer here: Do what’s right for you!

I have a friend who says she will never marry her boyfriend and never combine finances with him. On the other hand, I have a friend who combined finances with his now-wife shortly after they started dating. Personally, I was adamant about not combining finances before marriage. Any scenario for combining finances with your partner can work – as long as you agree.

Before you even think about combining your finances, you need to do two things:

  1. Address your own money management techniques and your concerns with possibly combining finances, then…
  2. Talk with your significant other about the process. Discuss your concerns and both of your money management techniques.

Here’s a checklist of things to cover during your discussion:

  • list of bank accounts to combine
  • how much is “too much” to spend without consulting the other partner
  • mock budget
  • why you really want to combine – is it a good reason?
  • bank account buffers
  • cash vs. credit vs. debit spending
  • combining all or just some accounts?

A couple words of caution: For one, do not combine finances after your first and only money talk. This decision should come after a long time (years) of developing trust and having open conversations about finances.

Secondly, and very importantly, remember that married couples can lean on the legal system to separate their finances in the event of a divorce; unmarried couples don’t (usually) have a legal system to separate their finances if they separate. In other words, if you’re not married, put all your money into a joint account, and your partner dumps you and drains the account, you could be both heartbroken and broke.

So if you do combine finances before marriage:

  • Don’t combine everything! Leave some accounts separate.
  • Create a simple contract that outlines what savings accounts and investments belong to each other (and what will be divided 50/50) before you actually combine any money. It may or may not help you legally recover funds in the event of a nasty breakup, but it’s better than nothing.

Is it okay to keep financial secrets?

No!

Okay, sorry, that was my gut reaction.

In my very humble opinion, I think you should put everything out there if you’re really committed to someone. Besides, secrets always seem to come out and look even worse when they’re revealed.

When we asked our focus group what the most difficult thing about managing money with their boyfriend or girlfriend was, here’s what some of them had to say:

  • “It’s difficult from a trust perspective…”
  • “Having the initial [financial] conversations…”
  • “We had trouble talking about our goals and spending habits.”
  • “Discussing what is fair…”
  • “Working as a team.”
  • “Managing expectations…”

As you can see, many of their concerns revolve around trust and communication – two things that secrets can destroy.

Maintaining a healthy and committed relationship is often hard enough. When you bring money into it, it can either weaken or strengthen the relationship depending on how each person handles the situation. This is why it’s so important to avoid keeping financial secrets with your significant other – especially ones that could affect them in the future.

Overall, managing money as a couple is a lot like managing other aspects of your relationship (schedule, future, vacations, etc.). It all revolves around communication, respecting the other person, and trust. If you have a solid foundation with your partner and can agree on  how to manage your money, it can become a rewarding part of your relationship.

Of course, if you feel any hesitations at all about combining your finances or becoming in any way more financially committed to someone, don’t jump in too fast. Money management can’t be taken lightly, so it’s important to communicate with your partner before making any decisions.

What bout you? Have you been successful creating a system to divide finances with your partner? Any horror stories? Leave a comment!

About Amber Gilstrap

Amber is a twenty-something CPA from Kansas City, Missouri who loves writing, working out, and---of course---finding fresh ideas for saving money. Follow her on twitter @ambergilstrap.

Comments

  1. I was sharing a joint account with my ex, where we would put the same amount each every time money was needed for rent, utilities or food. We enjoyed the surplus separately. I discovered lately that he was still linked to me on my credit report, even though we closed that account three years ago. He is super frugal and responsible so no horror story there, but everyone should know that!

  2. Bf and I just moved in together and we are still figuring things out. We try and split things as evenly as possible. At the end of the month we do a grocery reconciliation so that one person isn’t paying more.

  3. If I was to get married, I think I would definitely combine finances. For now, I’m just super honest with where I am and feel like splitting things 50/50 is the best route. Although it doesn’t have to be at the restaurant table (pet peeve of mine: when people fight about checks), one person picks up one meal, the other person the next. It will work out in the end and that way both parties feel like they are getting a treat every once and while.

  4. I am living with my girlfriend now and we are keeping everything separate. Once we tie the knot, we will have a joint account that we will manage the bills from, but will still have our own accounts. The money that goes into the joint account will be proportional based on who makes what to keep it fair.

    We decided to do this because we are both in our 30’s and have some assets. It’s easier just to keep everything separate than to combine everything. But who knows, as time goes on, maybe wi’ll find out that’s not the case!

  5. When it comes to splitting costs, I’m more of the don’t stress about it, just take turns picking up the tab, and everything will work out in the end.

    Sharing accounts before marriage is not a good idea! Sure, if it works out, not harm no foul. But, if you split up you can get left with nothing. You also have tied yourself to some one else credit wise. The risk far outweighs the benefit.

    I definitely think you should talk about finances before marriage, especially any debt you have. I know a guy who got married and only found out after getting hitched that his wife had $100k in student loans and bad credit. Not a good way to start a marriage.

    However I am hesitant to share financial info while dating. I have never told a girlfriend how much money I make or what kind of assists I have. They get an idea by what I do, but they never know for sure. The only thing I share with them is that I am debt free. I’m just not comfortable shring that kind of info until I know I am going to marry her. My feeling is that once I am engaged, that is when you share everything, debts, assists, incomes, etc. this is the time to share everything while you both still have a chance to back out.

    At the same time, once you do get married, all finances should be shared. If you are keeping separate accounts, then aren’t you just prepping for divorce? Doesn’t that automatically divide you two and financial decisions? So why get married if you don’t trust the other person? Also, from a legal standpoint it makes everything easier if one of you dies or is disabled.

  6. My significant other and I have been living together for two years and splitting things 50/50. We have a system for just about everything, but in the end every system and complication has gotten quite annoying. For example, we each write rent check for half the rent. Every other time we pay groceries, unless its costco, and then I buy (with my AmEx) and she gets the next two. We pay the cell phone bill every other month. I paid the electric bill for a year and then switched it to her name. After four years of dating, where she helped me get out of credit card debt by doing the envelope method for three months with me and two years of living together, where we’ve been very open about our finances, we’re opening a checking account together. We’re only going to put in enough money to cover rent, groceries, cell phone bill, etc, etc, etc. This way, if we break up, draining the account won’t amount for much.

  7. Aren’t there tax considerations for combining accounts? Something about how you can contribute such-and-such percent more than the other person to a joint account, if you’re not married?

  8. I’m glad you pointed out the financial dangers of combining accounts without the legal protection of marriage. I believe there are also relationship pitfalls that make even partial pooling a poor choice.

    Before my husband and I were married we just alternated paying for dates and paid our own ways for everything bigger. We made the same amount of money so the decisions were pretty easy. Neat and clean, and then we made everything joint after we were married.

  9. Lol interesting view on the subject. I find that usually the guy pays the bill, just because he doesn’t want to seem cheap to his significant other (poor us). Oh well, it’s worth it (or at least I think so).

  10. We have a good system right now but we aren’t married yet. We split things half and half and savings are up to us, by ourselves. When we get married, we’ll probably combine some and keep some separate. Complete combination isn’t for us.

  11. One thing that wasn’t mentioned in this but I have seen really impact newly wed couples is taxes. Going into a marriage people rarely ask their soon to be spouse if they have filed all their tax returns. Well this is something that can really be a shock when you get married. I have seen several situations where one person in a relationship either hasn’t filed taxes or owes a big debt to the IRS. Now that debt doesn’t necessarily transfer to the other spouse however there are situations it can still impact them. For example one situation I recently saw, a couple got married and joined their accounts. The spouse that didn’t owe money put a large amount of money in the account. The other spouse who had been hiding, or simply unaware, that they owed the IRS money had a levy placed on the account. All the money was pulled out and applied to the debt.

    Long story short combining finances, just like getting married is a big decision. It is important to do homework and make sure you go into that situation with your eyes open.

  12. Nice post…..
    Here is my situation. My girlfriend and I have know each other for 15 years. We dated on and off for about 5 years. We both needed some growing up to do and im happy we had some time apart to mature. We have no kids, but plan of having in the future. Marriage is some where around the corner and we are planning engagement ring/destination wedding.

    We are now saving majority of everything together in a joint account. The entertainment bills are split 50/50. We each pay our own bills as we do not live together yet. We use ING accounts for joint savings and other accounts. We determined if things goes sour all accounts will be liquidated 50/50.

    Its not easy as i own my house and she rents. I have great credit and she has ok credit. I have no school debt, but mortgage debt. She has 70k in school loans and thats just another story on tackling that. We have a plan in place to knock off all her debt in 5 years. She earns about 10k more than I and we are both working together as we have the same mind set and goals in mind.

    We split the accounts up like this:
    Stash fund
    Vacation fund
    Joint checking
    Car fund
    Investing fund
    Moving fund

    again its not easy, but we still have fun while planning for our future. Since we have the above accounts in tact. We are able to manage life, go away and break through financial barriers. We have been at this for maybe 1 year and here is what we were able to accomplish thus far.

    -Travel aboard twice a year.
    -bought a new accord majority cash and took a small loan to help build her credit.
    -made a plan to pay her school loans twice a month.
    -investment money is being saved for vanguard accounts. (we currently match our roth 401k at work)

    Its all a work in progress, but for us the trust and agreement plans are in place and saving together enables us to do what we probably couldnt do alone. Just my two cents. Ohhh an finally we both reside in NJ. I pull in 75k and she does 85k. I imagine things will get better once we move in under 1 roof, but time will tell.

    Good luck to all if you choose this route.

  13. forgot to subscribe to post =)

  14. My husband and I combined our bank accounts when we got married and recently he has opened up his own personal account. It’s not a trust thing, but a money management thing. Each of us has a set amount of “spending money” each month to spend on whatever we want (individual hobbies, etc.) or save up for a larger purchase. I watch the money regularly and am a saver anyway so I never have trouble with my amount. However, he is a spender and has trouble keeping track of how much money he has spent as the month goes on and has a tendency to go over which screws up our budget. So with his new account he puts his allotment in it at the beginnin of the month, and when he runs out of money he knows he can’t spend anymore. I think it’s going to work out well…

  15. When talking about splitting things 50/50 I have to ask how people see things as 50/50. If the rent is $1000, does that mean each pay $500? What if one party makes significantly more than the other? I like the following solution for 50/50. Calculate your total monthly expenses, for this purpose we’ll say is amounts to $2500 a month. If one party makes $4000 a month, paying $1250 (50/50) a month is equal to 31% of the monthly income. If the other party makes $6000 a month and pays $1250, that is equal to 21% of the monthly income. The scaled is tilted in favor of the person who makes more money. 50/50 should be looked at in percentages; each party should be paying 50% based on their monthly income, not 50% of the expenses.

    • A 50/50 split is a percentage split. Each person pays 50% of the bill, which is fair. Indexing it to income seems excessive and petty. C’mon, this isn’t communist Russia.

  16. I think this is absolutely the most important thing to remember: “Any scenario for combining finances with your partner can work – as long as you agree.” So many people get caught up in the “my way is the best way” mindset and that’s what can make financial conversations with family and friends so difficult. I’m always curious to see how other couples are managing their finances, but it’s challenging because people get defensive almost immediately. I really enjoyed reading about how different couples split the finances, but I think the biggest thing I’m taking away from this is “Like with all money matters, it comes down to communication and compromise with your partner and deciding what works best for you.”

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  18. My fiance and I make the same amount of money, so we have one joint credit card that we use for all joint expenses (groceries, restaurants, etc). At the end of the month, we each pay half of the amount owed and pay it off in full. If we can’t put something on the credit card, we write it down and adjust the amount we each owe. He pays the mortgage and I have an automatic electronic transfer to him each month for my half. We are also both responsible spenders (savers, really) so that helps. Then we are free to spend the rest of our money however we want, and the other person doesn’t judge. Easy peasy!