Pairing up? How to know when it’s time to combine your finances

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Money may not be top of mind if you’re in love, but it deserves some serious consideration if you want a lasting relationship.

A partnership that pools resources and shares expenses can be a very good thing for a relationship and for each other’s financial well-being. However, different spending and saving habits can also be an enduring source of conflict for couples.

From the point of view of managing household finances, sharing a joint bank account can make things a lot easier.

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“Money stresses people out,” said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York. “In general, the less moving parts, the better.

“If you’re paying bills and depositing checks from and into one account, it’s easy to see what’s going in and what’s going out.”

That, in turn, forms a good foundation to draft a common budget and establish financial targets together. It also gives both partners a good view on each other’s spending and saving patterns, and it can potentially highlight issues that need to be worked out.

Boneparth suggests that it’s better to find out about a partner’s spending habits, their debt obligations and general financial standing earlier rather than later.

“Ideally, you want to flesh it all out before tying the knot,” he said. “These things can create fractures in relationships.

“It’s about trust and honesty,” Boneparth added. “You need to address issues, find solutions, and support each other in these things.”

What to keep separate and when

A joint bank account is one thing, but comingling investment assets, sharing titles to real estate and other property is another. While people can and should designate beneficiaries for investment accounts and other assets, pooling assets and accounts with a partner may not always make sense.

Indeed, there can be a wide range of personal, financial and tax-related reasons why either comingling assets or keeping them separate is the best approach for a couple.

“There’s no one solution that is right for everyone; it’s a matter of individual preference,” said Boneparth. “There may be good reasons to keep some accounts separate and to divvy assets and liabilities up in different ways.”

The universal solvent for a lot of these issues is simply solid communication.

Douglas Boneparth

president of Bone Fide Wealth

For example, one person may have business interests, property or an inheritance they want to keep separate from a relationship. In some cases, it could be to ensure that a spouse is not exposed to potential liability that the other partner carries as a business owner or professional. In other instances, it may simply be the personal choice of one or both partners to manage their finances separately.

The context of merging or keeping assets separate is often considered under the guise of a prenuptial agreement before a legal marriage. The parents of one spouse, for example, may be concerned about protecting the assets they plan to pass down to their engaged child.

This process can, of course, be a source of friction and pain between a couple, but it is essential to address these problems up front and resolve any emotional issues.

The only way to ensure that the spending, saving, earning and inheriting of money doesn’t become an issue of conflict in a relationship is to put everything on the table and discuss it.

“The universal solvent for a lot of these issues is simply solid communication,” said Boneparth, who is himself married. “That’s what makes for a good relationship overall and for a good financial partnership specifically.”

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