Call it love at first sight. Call it pure pragmatism. Whatever the reason, a lot of new couples these days are sharing their finances relatively early in the relationship. By that, we mean they’re sharing a credit card or a bank account with a debit card.
We conducted a survey of 1,000 Americans a few weeks ago, and it found that 47% of couples who share their finances do so within six months after they started dating.
That’s nearly half of all couples who end up sharing their finances! After only half a year of dating, these couples decided they were ready to mingle their money.
Given that a lot of people are doing this, we got to wondering: What’s the best way to do this? What are some things you do when you’re merging your finances with your partner’s? We’ve got answers.
Pro Tip
Are you moving in together? Talk about these four things first.
A Breakdown of the Results
Our survey asked this question: “How long into your relationship did you start sharing a credit card/debit card/bank account with your romantic partner?”
Here are the results:
- 1 to 6 months: 47%
- 7 to 12 months: 18%
- Longer than a year: 35%
Pro Tip
Here’s our “love and money” guide to what budgeting looks like at every stage of your relationship.
Talk About Money Early and Often
Here at The Penny Hoarder, we’ve got a whole article on how to budget as a couple and stop fighting about money. We’re going to boil down a few of that article’s points here.
It’s not news that most fights in a relationship have something to do with money. It happens when the people in the relationship aren’t on the same page and have different attitudes toward money.
Talking about money early and often in a relationship can help you make sure you’re working together, rather than against each other, and prevent future fights.
Here’s how to talk to your significant other about money:
- Make sure you’re not tired, hungry or rushed. If you try to sit down and sort out money problems when you are, you’re doomed to fail.
- Be honest. Whether you realize it or not, you’ve each been raised with certain attitudes toward money. The more honest you are with each other about your spending habits, the easier it’ll be to avoid hurt feelings, and the more realistically you’ll be able to craft a budget.
- Discuss your goals. Decide what’s important to you: paying off a debt, taking that vacation or going to every rock concert within driving distance. Those goals will drive your decisions of how to spend your money — together.
Pro Tip
Here are 10 budgeting apps for couples that make it easy to share finances.
How to Budget as a Couple
Getting the discussion above started is the first step, but how does it really work on a day-to-day basis? How do you figure it all out together? Here are some practical strategies to help you start a budget with your significant other:
Take Stock of the Numbers
Gather your past few months of statements, bills, pay stubs and other financial documents. You’ll want to see where your money has been going to get an idea of where it needs to go in the future. Make sure to account for:
- Your income: How much do you bring in each month? Note the combined total of your income from your jobs or businesses. If one person makes significantly more than the other, talk honestly about how to handle it.
- Your obligations: List out things like rent, car payments, student loans, utilities, life insurance, phone bill, retirement contributions, even saving for a down payment.
- Your living expenses: This is anything that doesn’t have a monthly payment but that you need to buy anyway, like groceries, gas and pet supplies. This can be tricky because you purchase gas and groceries several times a month. Figure out what you typically spend on these purchases and use that number as a starting point for your first month of budgeting.
Methodology: The Penny Hoarder used Pollfish to conduct a national survey of 1,000 people about Americans’ financial habits in late January 2023. Survey responses are weighted so that each response is representative of the U.S. population.
Mike Brassfield ([emailprotected]) is a senior writer at The Penny Hoarder.
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FAQs
To start, leave some of your accounts separate. Then, try starting a joint account for shared expenses, such as rent, groceries and utilities. Make a list that outlines assets (investments, bank accounts) and debts (student loans, credit cards) and who they belong to and what you'll split.
How should married couples combine finances? ›
To start, leave some of your accounts separate. Then, try starting a joint account for shared expenses, such as rent, groceries and utilities. Make a list that outlines assets (investments, bank accounts) and debts (student loans, credit cards) and who they belong to and what you'll split.
Are couples who combine finances happier? ›
Research from Cornell University found that combining finances creates higher satisfaction in relationships and the happiest couples.
What is the 50 30 20 rule? ›
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.
How do most couples split finances? ›
The easiest setup is to have a joint account that both fund to pay shared expenses. Then each partner can have separate accounts to pay for individual assets. Both partners share the financial burden of day-to-day expenses while maintaining financial independence.
Should married couples combine finances, pros and cons? ›
Here's what they found: Couples who kept separate accounts or had no intervention experienced the usual decline in relationship quality over time. Couples who merged their finances were shielded from the decline.
Do most married couples combine finances? ›
The majority of married couples, 53 out of 119, did some form of combining but still kept separate accounts and split bills. It was then fairly even with the percentage of couples that either kept finances completely separate or completely combined. Here's another survey.
Should relationships be 50/50 financially? ›
'It's almost not fair to split finances 50-50'
For example, one partner may be saddled with student loan or credit card debt while the other partner is not. The latter may have the financial strength to carry rental or mortgage expenses so the other person can focus on paying down their liabilities, said Daigle.
What percent of married couples keep finances separate? ›
More from Personal Finance:
Almost half, or 46%, of people who are in relationships keep their finances separate to avoid losing their financial independence, according to a recent survey from the financial services company.
Should you combine finances before marriage? ›
Merging some, if not all, of your finances can help you strengthen your relationship by working toward shared dreams and goals. It can also prevent financial infidelity, a common cause of divorce in which one or both partners omits information or misleads the other about money issues.
Personal finance expert Dave Ramsey says if you're going through a tough financial period, you should budget for the “Four Walls” first above anything else. In a series of tweets, Ramsey suggested budgeting for food, utilities, shelter and transportation — in that specific order.
What is the 40 40 20 budget? ›
The 40/40/20 rule comes in during the saving phase of his wealth creation formula. Cardone says that from your gross income, 40% should be set aside for taxes, 40% should be saved, and you should live off of the remaining 20%.
How to budget $5000 a month? ›
Consider an individual who takes home $5,000 a month. Applying the 50/30/20 rule would give them a monthly budget of: 50% for mandatory expenses = $2,500. 20% to savings and debt repayment = $1,000.
Who should pay the bills in a relationship? ›
It is entirely up to the pair and how they wish to handle money in their relationship. When determining who pays in a partnership, communication is important. Couples must have an open and honest discussion about their financial condition, their desires, and their expectations.
Who should pay rent in a marriage? ›
California is a community-property state, and any assets acquired during the marriage belong to both spouses equally.
How do most married couples manage finances? ›
Some couples decide to split expenses down the middle, while others may be more comfortable paying proportionately according to what they earn. A shared spreadsheet may be the easiest way to track expenditures, or using a joint credit card may be preferable.
Should couples keep their finances separate or combine them? ›
There's no rule that getting married means you have to combine everything, including money. For couples in certain situations, such as blended families, couples with financial incompatibility or a spouse with an inheritance, it may be best to keep at least some finances separate.
Do married couples have to combine finances? ›
You don't have to view and manage money in the same way, but it's important to understand and feel comfortable with your differences. Money issues can be especially complex for older couples who are getting married. You and your partner likely have ingrained money habits that could be quite similar or hugely different.
Should married couples combine bank accounts? ›
"In most instances, I advise newlyweds to fully merge their finances by opening joint bank accounts," He says. But if you keep an individual bank account open for your own personal spending or business purposes, he says, "This is OK as long as they retitle the accounts to payable on death to their spouse.
