As with any successful relationship, communication is key, and honesty is the best policy. Discuss the current financial situation you each bring to the partnership, including the income, debts, loans, expenses, and spending habits. Although talking about money during any stage of a relationship can sometimes be uncomfortable, having these conversations with your partner early on is the first step in setting financial goals as a couple and building the foundation to achieve long-term financial success together.
Individual vs. Joint Bank Accounts – What’s Right for Us?
How you choose to manage your money as a couple is a personal decision and since no two couples are alike, a one-size fits all approach simply won’t do. Let’s break it down.
- Individual bank accounts. An individual bank account is an account owned by one person who is solely responsible for all transactions including credits and debits.
Individual accounts keep your money separate from your partners and is a great way to keep track of your personal finances but could make it more difficult to set household budgets and track overall spending. If monthly expenses are split between you and your partner, be sure you both set up automatic payments to ensure bills are paid on time so your credit scores remain intact.
- Joint bank accounts. A joint bank account is an account owned by two or more individuals that have equal privileges to make transactions like paying bills, making deposits, and withdrawing money.
The benefit of a joint bank account with your partner is that you both have access to the funds making it easy to monitor balances, combine income, pay monthly bills and other expenses. As with anything in a relationship, communication is especially important when it comes to joint accounts for couples. Make sure to stay on the same page as your partner about what is being funded from the joint account and when, that way there are no misunderstandings. If individual saving and spending habits are not aligned with joint financial goals, you may benefit from having a combination of individual and joint bank accounts.
- Individual and joint bank accounts. A combination of individual and joint bank accounts gives couples the freedom to maintain individual spending habits while keeping household budgets, expenses, income, and savings goals on track. This is a great option for couples who have been financially independent and are used to managing their own money. So, go ahead, buy the shoes, the gaming system, or surprise your significant other with a gift purchased from your individual account; all while contributing to your joint account for your couples get-away.
How to Keep Managing Your Finances as a Couple
Don’t forget to keep the conversation going. Life changing events like employment opportunities, income fluctuations, and family expansion are good times to assess your financial health, shift priorities, and realign them with current goals.
No matter how you choose to manage your money as a couple, remember to be patient with each other. Merging lives and money at the same time is not always easy but once you start the conversation, lay the groundwork, and open your accounts, divvying up the housework will seem like a piece of cake.
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