How to Combine Your Finances as a Couple

As I’ve mentioned in previous posts, Cassie and I have merged a lot more of our finances over the past year. In the long term, joining your finances can greatly simplify your financial picture. It’s also helpful for really tackling your financial and life goals as a team — but it can be a bit daunting to know where to begin and what to do. 

Since we’ve recently been through this as a couple, I thought it would be helpful to write a little guide on some steps to take when joining your finances with a partner. 

I won’t be talking about deciding whether to combine finances in this post, since I’ve already written about that elsewhere, but rather what steps to take once you’ve already made the decision to merge them. 

I’ve split the guide into three parts for clarity: New Accounts, Old Accounts, and Budgeting Together. 

Opening New Accounts with a Partner

When first joining finances, you’ll likely find that you’ll need a few new accounts. You can either accomplish this by opening a truly new joint account or by adding your partner as a joint account owner on your existing accounts. 

If you’re fully joining your finances there are at least three joint accounts you’ll want to have.

Joint Checking Account

A few years ago, we opened a new joint checking account with Ally that we each funded monthly to cover shared bills like our mortgage. We chose Ally because they offer interest-bearing checking accounts as well as high-interest savings accounts, and they also support Zelle and have a simple user interface.

But don’t forget to actually send your income to the joint account! It needs to be funded in order to actually be useful.

Don’t forget to update your direct deposit to flow into your new joint account. Now that we’ve fully joined our finances, we have both of our incomes direct deposit straight into this account, since we now pay all of our bills and credit cards from here. 

Joint Savings Account

You’ll want to open a joint high-interest savings account to start saving for those larger financial goals that you share, whether it’s a vacation, buying a house, having a kid, or something else entirely. When you open this account it’s a good idea to discuss what you are hoping to save for and to set a goal amount to set aside each week or month. We have a high-interest joint savings account at Ally as well. 

Sometimes people will ask me why they should bother opening a high-interest savings account when they could either keep their regular savings account or put that money into the market and earn a higher return. As of February 2023, our annual percentage yield (APY) on our Ally savings account is 3.4% and it has no monthly service fees — compare that to the average brick-and-mortar APY of 0.01%. You can actually save and earn money in these types of accounts!

Investing in the market is also worthwhile, but when it comes to things like saving for a house or your emergency fund, I recommend having that money easily accessible. So, high-interest savings account it is.

Joint Credit Card

Opening a new joint credit card where you are both authorized users and both have your own card is helpful for covering all of the day-to-day spending. We make almost all of our purchases on our joint credit card so that we earn points, and then pay it off every month from our joint checking account. 

Since your joint credit card will likely become your default card for most purchases, it’s a good idea to pick one with good rewards and a decent sign-up bonus. If you travel a lot, consider the travel cards available to you. If you’re a Costco aficionado, consider their card — “good rewards” is relative to what you’ll actually use and benefit from, so keep that in mind when you search.

Dealing with Old Accounts when Merging Finances

Decide Which Accounts to Keep or Close

Since you will both likely have your own personal accounts already, you’ll want to make a list of all of the accounts you hold and decide which ones you want to keep and which you want to close. 

For example, I kept my personal checking account because it’s associated with a bank that has a brick-and-mortar location near us. Since our joint account is through an online bank, we thought it was a good idea to also keep an account open with a bank with a physical location for occasions when that is helpful. 

We also kept most of our individual credit cards even though we don’t use them as often, since closing them can hurt our age of credit and lower our credit score. You also may have a credit card that you love and want to add your partner to as an authorized user and just make that your joint card. 

Now that you are consolidating things there should be some accounts you can close. For example, I had a personal high-interest savings account. I was able to close that and transfer the money to our joint savings account. We also had a few credit cards with annual fees that we chose to close to avoid continuing to pay the fees.

Change Autopay to be Funded by Your Joint Account

For the credit cards you decide to keep, you’ll want to set them up to autopay from your new joint account since your regular income is now going to that account. 

You’ll also want to make sure any recurring bills that were set to autopay are now set to come from your joint checking or credit card. There may be a lot of these, so I recommend making a list of all that you can think of, updating them all at once, and then each time one pops up that you forgot, update it when you find it. 

This is also a good time to also see if there are opportunities to save by bundling together, such as on car insurance, cell phone bills, and other things you may both be paying for independently.  

Updating Your Beneficiaries

Another important step is updating your beneficiaries on any existing accounts (checking, savings, retirement, investment) to be your partner. You can do this easily online and it should only take a few minutes. 

You should also make sure your partner is listed as the beneficiary if you hold a life insurance policy, and that they are listed as a co-owner of any shared physical assets, such as a home or car.

Start Budgeting with Your Partner

Once you’ve done all of the nitty-gritty logistical things to combine your finances, now you have to figure out how to manage the day-to-day of your money as partners with joined finances. Meaning, good ol’ fashioned budgeting together! 

I’ve written a whole other article about this topic specifically, which you can read here! But I’ll also outline the basics quickly again below. 

Determine Shared Financial Priorities

First things first: you should get on the same page when it comes to your priorities around spending as well as short- and long-term financial goals. 

If you haven’t yet had many discussions around money, I suggest checking out this post as well to get you started.

Set Shared Expectations

Set some expectations around spending. What is the dollar threshold for when a larger purchase needs to be discussed with your partner before being made?  What is the amount of judgment-free fun money you will set aside for each of you each month? 

Budget Using All Accounts (New & Old)

Make sure you include all of your accounts (both joint and pre-existing personal) when tracking your spending and categorizing purchases. This is easy in You Need A Budget, but make sure to take the time to link up all of your accounts to whatever budgeting system you’re using! 

This will give you a lot of clarity around how much your life as a couple costs, makes it easier to align your spending with your priorities, and lets you see the progress you’re making toward your financial goals. 

Check-In on Your Financial Life Regularly

Budgeting is a verb. It’s an ongoing process and your budget requires regular maintenance and adjustment. Make sure to schedule time to come together regularly to categorize spending, make a spending plan for new dollars, and make any necessary changes to the budget. Regular maintenance should probably happen once a week or so, whereas you should also plan to have larger conversations around your goals and priorities every 6 months or so.

Combining our finances helped us feel more like a team when it comes to planning out and saving for future goals, and it helped us have more productive conversations about our money and priorities.

Choosing to join your finances is a big decision and not one that should be made lightly. It’s also a spectrum, so you can pick and choose what pieces make the most sense for you to merge. If you and your partner have decided you want to join your finances, congratulations, that’s a big step, and I hope this post was helpful!

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