When our parents got married, it was automatic. Finances were merged and women changed their name. In today’s world, many couples are opting to keep their name and their finances their own. 

For a variety of reasons, they both want to retain some level of independence.

So, to merge or not to merge? There are pros and cons for both sides, so let’s look at a few which may help you decide whether to merge your finances.

When do you merge your finances?

Once you have moved beyond the dating stage, and are contemplating building a life together, the easiest place to start is with a partial merge. Talk about money and decide how you are going to pay the household (shared) bills. The most common option at this stage is each of you contribute to a “bills” account and pay household running costs from there. It’s a bit like having a flat account. The rest of your income is your own and you pay all of your own lifestyle expenses and debt.

You can contribute 50/50 to this account, or if there is a significant income difference you may choose to contribute based on your incomes.

Many couples will stay in this partial merge for several years. That’s fine: do whatever works for you.

When you begin to think about major financial decisions such as buying a home or starting a family, both of you should have worked through your money behaviours. You will know which of you is the spender or saver; what each other’s financial situation is, and you will be setting joint financial goals. Now is the time to start merging fully and use the power of combined thinking to achieve your goals.

When not to merge …

1. Don’t merge your finances until you know your partner’s full financial situation. If they have come into the relationship with bad credit, or significant debt, this can affect your own and joint credit rating. You need to know exactly what the situation is and have a plan on how to deal with it before you merge.
2. Don’t merge your finances until you have set some boundaries around spending. If one of you is a spender and the other a saver, resentment can build very quickly on both sides if you don’t have boundaries (i.e., a money plan) in place.
3. Don’t merge your finances until you have had the money conversation.  We all have financial baggage, whether it comes from our parents or past relationships. Until you both have worked through this it is probably best that you do not merge your finances completely. Do not under-estimate the importance of this. If you are having trouble working through it, get some help.
4. Definitely do not merge your finances if your partner has addictive behaviour. Addiction isn’t just restricted to gambling, drugs and stealing; it could also be shopping, alcohol or a myriad of other pervasive behaviours. A relationship like this needs serious counselling to work through the addiction issues before you contemplate sharing a bank account or credit card.

It is, however, very important (more so for women, according to Olivia Mellan, an expert on money and relationships) that you have some separate money.

The cynical say women need to have separate money to protect themselves should the relationship fail.

Mellan, on the other hand, says it is important for women to have separate money to give them their own sense of identity.

Whatever the reason, both of you need to have “play money” of your own that you can do what you like with. How much that is will depend on your own circumstances. What you include will depend on how you define “play money”.

The key message

Don’t feel you have to combine your finances as soon as you enter a long-term relationship. There are stepping stones along the way.

And just because you are getting married doesn’t mean you have to give up your own bank account straight away.

If you would like us to help you explore your own relationship with love and money and that of your partner, drop us an email or click on this link to find a day and time that suits you to have a chat with us – it’s completely free!

While you’re here, take our free Money Personality quiz.