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Pros & Cons of Combining Finances with Your Partner

When you’re cohabitating with your partner, in a long-term relationship, or are married, the topic of finances and splitting costs becomes more and more eminent. Money is involved in most of our daily decisions, and eventually, you reach the point where combining finances becomes a logical next step.

But is it?

While combining finances can be the best solution for some couples, it may not be the wisest decision for others. To help you determine how to approach this monumental money decision, we’ll review the pros and cons of combining finances with your partner.

Money in Relationships

Before we dive in, let’s clear up what we mean by combining finances:

It doesn’t necessarily mean you have to instantly combine every single dollar you have to your name into one bank account and share the debit card (although it can be if that’s what you both want).

Combining finances is about making financial decisions together. Pitching into your financial responsibilities as a couple and wealth-building through joint accounts. This can look different for each couple.

For example, some couples continue to have separate checking and savings accounts but contribute a percentage of their paychecks to joint savings and checking to pay bills and recreational activities.

There’s no right or wrong way to combine finances. Still, communication is vital, as long as you both discuss what’s fair and what you’re willing to give to reach an agreement that’s favorable for both parties.

couple sitting at kitchen island viewing laptop screen

PROS

 1. Straightforward and Efficient Decisions

Budgeting, paying bills, spending, and saving are a million times more manageable and efficient when money comes out of one place. Every dollar you have to spend has already been pre-assessed and predetermined.

When you have joint responsibilities like rent and buying groceries, it makes everything more straightforward when it’s coming from one place you both have control over.

Related: 9 Great Money Apps to Help You Achieve Financial Goals

2. Bigger Money Goals

Two is always better than one; when you combine your finances, you have a greater ability to create and reach bigger financial goals.

FYI, a savings account can inflate much faster when two people are investing in it. Ditto to being able to pay off debt more quickly.

3. No Funny Business

You can protect yourself from being blindsided when you have a better idea of what your partner is doing with their money.

I don’t mean monitoring every dollar spent, but having a good idea of where their money comes from and where it goes can protect you in worst-case scenarios (gambling addictions, large debts, fraud, etc.).

4. More Money More Perks

Pooling together your money and spending through joint accounts and credit cards will let you qualify for big perks.

When both of your finances are combined, they amass to larger amounts than when kept separate; most banks offer better interest rates on savings accounts, loans, and mortgages for larger balances. Plus, when you both use the same credit cards, you can rank up more points and rewards from two people use one account.

5. More Security—Less Stress

When two paychecks are going into a savings account and paying off bills, it creates a more robust safety net for both people.

This makes it less stressful when thinking of emergencies; it can also make the cost of raising a family less stressful. It can encourage you to take more risks with your money and career too, which can potentially make you more successful.

CONS

1. Dragging Each other Down

When you combine finances, you’re adding more zeroes to your bank account, but maybe also some problems. Your partner’s money troubles become your money troubles.

This is a big issue when one person in the relationship has more debt or other financial obligations such as child support, alimony, or a flat-out financial crisis. It becomes harder to shield yourself from your partner’s economic woes.

2. Losing Financial Freedom

While dismantling your financial secrets can be a good thing, full transparency can also be constricting and problematic. Consulting your partner on random and personal purchases can fuel resentment and make you feel like you have less autonomy.

At the end of the day, it becomes the couple’s money, not your money. Splurging on stuff as if you were single may not be an option anymore.

3. Uneven Playing Field

When one person makes a lot more money than the other, combining finances is a lot tricker. Deciding whether it’s fair to split it 50/50 or split based on the percentage of income can be a struggle.

And after reaching a decision, the person making a lot more money may begin to feel that they’re subsidizing their partner’s life, and if they split it down the middle, the person making less money may feel it’s utterly unfair. This uneven playing field can be a significant source of contention and resentment.

4. Splitting Up

Separating as a couple is difficult, but when finances are combined, it makes a separation a lot harder.

When your money is put into joint bank accounts, credit is utilized by both parties, loans are under both names, and mortgages are involved, you may need a third party to help you sort through your finances and separate them in a fair (and legal) manner.

5. Conflicting Mindsets

Sometimes you and your partner can never decide where to eat out or have different tastes in music, and that’s okay! But when one partner loves to overspend on clothes while the other loves to “over save,” it’s a recipe for disaster.

Combining finances when you have conflicting spending habits and long-term money goals can be detrimental to your relationship just as much as your wallet.

Final Thoughts

There’s no right or wrong way to make money decisions with your partner. That is, as long as you reach an agreement that suits both of you.

Whether you want to keep your money separate from your partner and Venmo each other for bills or want your paychecks direct-deposited into a joint checking account, it’s essential to do it as a team.

Several apps make it easier for you to manage your money either way!

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