Eight things to consider before joining finances with a partner

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Merging finances with your other half can be complicated, but there are a few things you can do to make sure things go as smoothly as possible

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When you’re in a serious relationship, there are lots of reasons you might consider combining finances with your partner. But managing your money together can sometimes be complicated.

To avoid any stress or disagreements later on, it’s worth taking the time to speak about your finances and plan things out. Read our tips to find out about the sort of things you should be talking about.

Think about your reasons for combining finances

First, it’s good to think about why you want to start managing money together and if you’re ready for that commitment. Whether you’re coming up to a big milestone – like moving in together, buying a house, getting married or having a baby – or you have other reasons, make sure combining finances is what you really want to do, not something you feel like you should do or are pressured into.

Know the pros and cons

Take the time to understand the pros and cons of joining finances. While it can be very convenient – making it easier to split expenses, household bills or other joint purchases – there are some important things to think about. If you open a joint account, you’ll have equal access to each other’s money and you’ll both be responsible for any debt or overdrafts, so it’s really important that you trust your other half. It’s also important to discuss your credit ratings and flag any issues, as sharing a bank account or taking out a mortgage with your partner means you’ll be ‘co-scored’ for credit.

Take our quiz to find out how much you know about your credit score and where to check it.

Understand each other’s financial position

Think about your own personal finances before you sit down with your partner, and make sure they do the same. That way, when you come to have a discussion, you’ll have a good idea of where you both stand. Make sure you consider: 

  • Your salaries (including any bonuses)
  • Any savings or investments (as well as pensions)
  • Outstanding debt or loans (plus student loans)
  • Your credit scores
  • Anything of value you currently own (like a property or car)
  • Your financial goals for the future

Check your spending habits are compatible

You might think you know your partner very well, but day-to-day spending and budgeting aren’t things we tend to speak about very often, especially when you have your own income and separate bank accounts. However, when you start managing money together, it’s important you’re both on the same page. Take the time to draw up a budget and a weekly or monthly spending limit – try using a budget planner if you’re finding it a bit tricky – and agree on how much you both want to put into savings too.

Discuss how you’ll deal with expenses

There are lots of different ways you can approach your expenses, especially if you’re living together. Depending on income, salaries and personal situations, some couples choose to split things 50/50, some split their bills and expenses in proportion to what they earn, while others may have an arrangement where one partner pays for everything. You’ll need to work out what suits you and your partner best. It’s also worth talking about how you typically pay your bills – do you like to plan ahead and set up direct debits, or pay for things as and when they come up?

Decide what you’ll combine and keep separate

Next, you’ll have to decide which bank accounts you want to keep or close, and if you want to open any new accounts together. Keeping your own separate bank accounts (where your salary gets paid) and paying an agreed amount into a new joint account (for shared household bills such as utilities, rent or groceries) can be a good way to ease yourself in. Then if things go well you can agree to share more responsibility. You could also look at opening a joint savings account if you have something you want to save for together.

Track your finances

Once you’ve started to combine your finances, it’s important not to let things slip – monitoring your money regularly can give you a picture of exactly where it’s going. Most big banks, like HSBC, Barclays and Santander, offer apps where you can track your finances online, while newer mobile-only banks like Monzo, Starling and N26 let you manage everything directly from your phone. Or you could try using a cash management tool, like Money Dashboard, Yolt or Mint.*

Review things regularly

Make sure you’re both checking in on your account, budget and spending regularly, and talk to each other to check you’re happy with how things are going. If any issues come up, or something happens which means your circumstances change – like a pay rise or job loss, or if you decide to get married or start a family – review your budget and come up with a new plan if needed.

And what if things don’t work out?

It’s not something we like to think about, but relationships can break down and possibly leave you in a complicated financial situation. The more accounts, loans, financial responsibilities or belongings you have together, the trickier it is to split everything, so it’s worth knowing the facts before you set things up in the first place. Visit Citizens Advice for information on dividing up money and belongings after you separate and the Money Advice Service for guidance on sorting out your finances after a break up.

*This section gives examples of the types of banks and apps that offer these services. Please note that Royal London isn’t recommending specific organisations.

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