We live in an age where most households require two adults to be working full time just to make ends meet. However, a single person’s finances are often quite complex, and seamlessly joining forces with a significant other to take on the world together isn’t always straightforward. Despite the various complexities, it’s crucial to get all your ducks in a row as a couple to create a solid foundation you can build from.

The process can be further hindered by the emergence of several contentious points. It’s important to keep in mind that how you merge your finances can be unique to you. Couples have to figure out what works for them.

Relationship Comes First

Before even considering whether to merge your finances, you both need to be open and honest about your relationship. It’s important that you’re both committed to each other for the long haul. Once your financial obligations are entwined it can be a lot harder to separate everything again if the need arises.

Apprehension or uncertainty from either person doesn’t mean you’re doomed, maybe merging your finances is something for in a year or two, and you’re just not quite ready. However, if both parties are happy to proceed and commit to each other further then it’s time to start talking about how it’s going to work.

Start with a Breakdown

No, we don’t mean sitting in a corner crying, we’re referring to the other kind of breakdown. List all your current monthly expenses and debts and all the sources of income and savings you both have. It’s very unlikely you’ll both have a similar level of debt and earnings, so you need to discuss how existing debt is tackled. Some people prefer to pay off their existing debts themselves, while other couples are happy to combine the liability and get rid of it as quickly as they can together.

Once you have a comprehensive breakdown of all your assets and liabilities, and you’ve started to build an idea of what you are both comfortable with, you can start discussing the best way to set it up for you.

No Hard and Fast Rules

When it comes to tackling your debts and monthly expenses there are no hard and fast rules. Some couples like to merge their accounts and have everything coming out of one account. Others like to maintain their independent accounts and set up a bill account where both parties pay an agreed amount into on a monthly basis. Others like to split the bills so some are paid out of each account.

This can also be a good time to start being honest with each other about your financial priorities. If one of you is a hardcore saver and investor, and the other likes to spend all their residual income on traveling, then talking about some compromises at this stage can help things to go a lot smoother. You can use this to set personal and joint goals, building a clear path to your career and family objectives.

Whichever way you both decide to move forward, it could also be worth considering a co habitation agreement. This is an official document that establishes specific financial and family agreements relating to the relationship. It offers the same protection to common law couples as a marriage agreement or pre-nuptial agreement would to a married couple.

Define a Goal

A good introduction to joint finances is working together to achieve a joint goal. This can be a holiday you both fancy, or maybe you’re planning for your wedding or trying to save a house deposit. Whatever the reason, starting with a single clearly defined goal is a great way to dip your toes into the waters of joint finances.

Once your goal is achieved you’ll see the benefits of combining forces. Then you can start to merge other areas of your finances a little at a time or jump in with both feet, depending on how you are as a couple.

Define Your Roles

Money can be very personal. Two of the biggest causes of arguments in a relationship are money and children. Avoid stepping on each other’s toes by knowing what your role is within the financial relationship, and where the line not to be crossed is. One person’s essential item is another person’s frivolous purchase. Having a clear picture of how the details will work, how money is divvied up, and how often you’ll check your progress helps to keep you both working together.

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