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You've met the one, and now it’s time to tackle the tricky subject of merging finances. If the snapshots of seemingly perfect couples on Instagram are any guide, it appears that blending every aspect of your life, including your money, is the way to go. But is it really that simple?
It’s what you're 'supposed' to do, right? You're in love, and financial or personal boundaries seem unnecessary. But what if past experiences with partners or your own financial mistakes make you hesitant? In today's world, showing love doesn't automatically require merging your finances entirely—or at all.
Here’s what you should think about before opening any joint accounts.
Trust your instincts and take things slow
If you have any doubts about sharing financial responsibilities with your partner, it’s wise to delay opening joint accounts.
“You need to be in a relationship where you trust the person you’re with, because [with a] joint account, either person could completely liquidate the account,” said Kari H. Lichtenstein, a partner at family law firm Stutman, Stutman & Lichtenstein. “Both parties have the right to spend whatever money out of it.” If you haven’t had the necessary conversations about your financial situations (like discussing student loan debt), it might be best to wait.
Because if that person decides to take off with your money and you break up (which I’m assuming would be happening at the same time), recovering your money would be a significant legal challenge.
If you’re just moving in together or preparing for marriage (especially if everything seems promising for the future), there’s no need to merge your finances all at once. In fact, research by UCLA has shown that while long-term couples who share bank accounts tend to be happier, those who do so early in their relationship (like during the first year of dating) don’t always have the same positive outcome.
Rather than jumping in all at once, consider opening a joint account and using it solely for certain shared expenses, like rent or utilities. True love doesn’t mean automatically depositing your entire paycheck into a joint account.
There’s no one-size-fits-all approach to combining your finances
A 50/50 split isn’t mandatory for a successful long-term relationship.
The key to managing finances as a couple is open communication about expectations and financial duties, while finding a method that works for both. If both of you have similar incomes, you may choose to contribute equally to your joint account. If one partner earns more or only one of you works, it may make more sense to contribute a percentage of your income.
“I’ve seen couples approach budgeting by creating multiple accounts, each designated for a specific purpose,” said Lichtenstein. One client even had accounts for each child, a vacation fund, and their veterinarian. “They always had money ready for unexpected vet bills. It was like self-insurance for their dog.”
For some tips on how couples with two incomes can manage their cash flow, check out this post.
Just because it’s separate doesn’t mean it’s yours
In certain states, Lichtenstein cautioned, it doesn’t matter which bank account is in whose name. If you earned the money while married, it belongs to the marriage and can be divided in the event of a divorce. “Unless there’s a prenup, that money is not considered individually yours,” she explained.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states where income earned during the marriage is jointly owned by both partners. This also applies to debts.
The only way to ensure that your money or other assets remain fully separate from your spouse’s is by having a prenuptial agreement. A prenup doesn’t just prepare for a divorce—it can also set expectations for how partners will manage finances as a married couple. And it's not only for those with significant wealth. A prenup can help define your financial expectations in good times, making any bad times easier to navigate.
The cost of a prenup varies depending on where you live and the complexity of your finances. If you hire a professional (as opposed to using an online form), expect to pay at least $2,000.
If marriage isn't in the cards but you still want to set some legal boundaries, you might want to explore a cohabitation agreement.
There’s no shame in keeping some things separate
You don’t have to be a flawed couple just because you don’t merge all your financial accounts. Lichtenstein advises that it’s a good idea to keep some of your money separate from your partner’s, even if you’re both eager to open joint accounts.
“You never know what might happen,” she said, whether it’s an emergency or simply a moment when you want to spend without feeling accountable to your partner for every cent. “It gives you a sense of control over what you can and can’t do, within the marriage or relationship.”
