How Should Couples Merge Their Accounts?

Last weekend, Miss Blinkin and I began the process of merging our finances. After mentioning the merger on the blog, I received a suggestion from The Blue Collar Workman.

You should definitely share how exactly you two Blinkins are combining acounts, etc. Whose money is paying for what? Do you get allowances or take what you need? Whose bank? etc. It would be awfully interesting to hear how you do it and how it goes!

Just about everything I do can be described as “awful” or “interesting” so I think I can do this.

Before we discuss account management, let’s take a step back and cover something more general: Money. 

How Should Couples Discuss Money?

Since I’ve been engaged for all of 1 month, I’m clearly qualified to dish out some advice.

Money is a touchy subject. A lot of people prefer not to talk about it. Why? Because most people don’t have as much of it as they lead on. If they are open about their finances then they will incidentally reveal their mistakes.

When have you ever heard someone describe their ideal hunk as “tall, dark, and broke?”

Never.

But that doesn’t mean you can’t be in a relationship. Fear not, money isn’t everything. What is more important is honesty. If you are struggling financially, tell your significant other. You don’t have to use the word “struggling.” Instead frame it with something like: “Hey babe, I accidentally killed a guy a few years back and didn’t tell anyone. No, I’m only kidding. But on a serious note, my bank account is kinda low.”

Honesty is the best policy.

What happens when you’re not open about your finances?

Example:

Girl meets guy. Guy doesn’t have a lot of money. Girl expects fancy dinners. Guy can’t afford fancy dinners. Guy has two choices:

a) Pretend to have more money than he does. Eat fancy dinners. Gets into worse financial position. Stress causes guy to get angry. Girl dumps guy.

b) Don’t eat fancy dinners but blame it on “not wanting to go out.” Girl dumps guy.

If you’re not honest about your situation with the person that is supposed to be closest to you, you have no chance at having a meaningful relationship.

Ramit Sethi has some great advice around how to introduce money into your relationship.

Bring the topic up lightly. “Hey, I’ve been trying to learn about money lately…What do you think about investing versus saving?” If you don’t get an answer, try this: “Okay, hey, I have another question…What do you think about my spending? Is there anything you think I should change?” I guarantee you they’ll have an opinion on that – and although you’re sacrificing yourself, at least it’ll get the conversation started. Visit Ramit’s site for more information.

So you all have had the money conversation, now how do you go about merging accounts?

How Should Couples Merge Their Accounts?

One thing I’ll always stress is that personal finance is personal. What makes sense to me may not make sense to you. You should constantly compare the alternatives to ensure you’re making the best decisions possible. I know a lot of people that will set up 100 different accounts depending on the purpose for the money – which is fine – because it makes sense to them. I, however, prefer simplicity.

So I am opting to close my accounts (except my credit cards and my business account) and add my names to her accounts. One reason I chose this solution is for simplicity. I want to keep the number of companies I do business with to a minimum. Also, I chose this solution because closing my accounts requires action.

I have had automatic drafts from my checking account for a long time. I’m a huge fan of the automation because it ensures that I will save and my bills will be paid. But sometimes automation can be a bad thing.

I have watched roughly $80 disappear from my checking account each month simply because I’m lazy. A Netlix subscription and my gym membership. Neither of which I have taken full advantage of. The need to close my account forces me to discontinue these drafts.

We’re going with the simple setup of 1 checking, 1 savings, and a joint credit card. We will put $4000 into the checking account ($1000 each biweekly) and the remainder into the savings account. We expect to live off of 1/3 of our income and save the rest.

We are both smart spenders and solid savers so, thankfully, there are no difficult conversations to be had.

Readers: Do you prefer to keep your accounts separate? Do you talk about money with your significant other?