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Deciding whether to combine finances — including bank and investment accounts — is a big decision every couple must make.
But beyond that, I think couples are missing something: Having regular, open conversations about how money is being managed and spent.
A recent survey showed that more than half of millennial women defer to their spouses on financial issues. No matter your gender, though, participating in your own financial life should be a priority.
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If you’re in a committed, long-term relationship, you need to talk to your partner about finances.
Communicating openly and honestly about all things money — from how you feel about it to your long-term goals to some of the nuts and bolts of your current situation — is the first step in making informed decisions about how best to align your resources in a way that benefits you both.
Once you have those first few discussions, you might start wondering about the mechanics of managing your money as a couple. One of the most common questions that comes up, and that most couples get stuck focusing on, is whether you should combine accounts or keep everything separate.
While that’s an important decision, I think it misses a bigger, even more important point.
Managing your money has to be a collaborative effort
I truly believe that how you choose to handle money as a couple is a personal decision, and the best authority on the topic will be you and your partner.
But this comes with a big caveat. I also firmly believe this only works if you communicate openly, honestly, and frequently about money — and it only works if you both work together and actively participate in the process.
The problem is, this rarely happens.
In fact, surveys show over half of millennial women defer financial decisions to their spouses. They opt out of participating in their own financial lives — and this is a much bigger issue than whether or not you combine or separate your finances.
While that survey only looked at millennial women, it doesn’t matter your age or your gender. Your money and decisions around your finances determine so much of what happens in your life. Almost everything is, at least in part, a financial decision. So don’t abdicate your ability to be part of the process of setting your course, taking actions to get where you want to go, and enjoying the destination once you arrive!
It doesn’t matter whether your partner ‘knows more’ about money
Look, I can understand loving and trusting your partner, even to the point where you let them manage your household’s money.
I’m married myself, and we fully combined our finances and hold our assets, like our home and non-retirement investment accounts, as joint owners with rights of survivorship. My husband is even a financial planner, so I absolutely trust his expertise and he objectively has more education, training, and experience than I do in financial matters.
But that doesn’t mean I just check out of the money stuff and ask him to figure it out.
We are still very equally involved in our finances, from the day-to-day budgeting to the big-picture, long-term financial strategy. We don’t make financial decisions without each other’s input and buy-in. We’re a team and we’re building a life together, and that’s reflected in the fact that we’re both equally involved in what’s going on in our financial lives.
What matters in your financial success as a couple is that you and your partner manage finances proactively and as a team working toward common goals.
When you share a home and a life with someone, you should be equally involved in the financial decision making of that household. Your money management system should reflect everyone’s active participation in that it should be something that everyone understands and can take part in.
Kali Roberge is the chief operations officer of Beyond Your Hammock, a fee-only financial planning firm based in Boston, Massachusetts.
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