Let’s say you’re a newlywed in your early 40s who entered the relationship with various assets, debts, and accounts. Should you keep your finances separate, merge them, or both?
Whether you’re getting married or embarking on a long-term relationship, finances are a finicky subject for couples, and what works for one pair may not work for another.
Here’s a case for taking–or avoiding–the three basic avenues of couples finance:
Keep it separate!
Get Rich Slowly advocates for separate finances in relationships if one or both members “lacks financial discipline,” i.e. a substantial amount of debt or a messy mortgage.
Mint also says a couple should keep separate finances if one or both partners are paying child support or alimony from a previous marriage, or recently came into a substantial inheritance.
According to Consumerism Commentary, creating joint finances is the first and last step a couple should take with their finances. One caveat: the article mentions “this step is easiest when each side of the couple produces roughly the same amount of income for the same amount of work.” With comparable incomes, joint finances could make things easier.
Bargaineering argues joint finances are less complicated, and provide better rates on bank accounts. Joint-checking can help you skip out on low balance fees, helping you to save hundreds a year.
Try both–and see what happens.
Bankrate makes the case for a combination of joint and separate finances, in which each member keeps an individual bank account along with a joint bank account to pay bills and manage living expenses. If the couples are completely different types of consumers, they can maintain their lifestyles, too.
Ruth Hayden, author of For Richer, Not Poorer: The Money Book for Couples, also tells SmartMoney couples should practice varying levels of financial autonomy and ease into it, slowly. Mortgages or kids could be a game-changer, and there is no rush.
If none of the above is working, try consulting a financial therapist–the newest (and hippest) in mental health counseling.
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