Paying Together Is Staying Together: Combining Your Finances

 You and your significant other are now under one roof! Not only are you sharing a bathroom and closet space, you’re also sharing rent, utilities, and grocery bills. Combining finances with your partner brings together money and love —and truth is, both are emotional subjects.

So, to keep things calm as you make the transition, it’s a good idea to decide on ground rules before you face a disagreement. Here are some tips to get started bringing your finances together.

Rule #1: Create a System

By establishing ahead of time where the responsibility lies for each expense, you’ll eliminate the potential for misunderstandings and overreactions when bills start coming in. Figure out which costs should be considered joint, and which you or your partner will handle individually. I consider a joint expense anything you both use together (rent, utilities, cable, Internet, groceries, and insurance). Set up an account that the two of you share, and pay your joint bills with automatic debits from that account.

Your individual expenses include the things each of you pay for on your own: shopping, hobbies, credit cards you opened before you got together, and eating out separately. That said, consider setting up your joint and individual accounts with the same bank or credit union. That way you can easily transfer money into your combined account on payday.

Rule #2: All’s Fair in Love and Budgets

You and your partner probably don’t make the same salary, so one way to even out your joint expenses is to contribute proportionate percentages of your income toward your shared budget. To decide how much each of you should contribute, first total the monthly expenses that will be coming from your joint account. Divide that number by the total of your combined monthly income. The resulting percentage is what each of you will contribute from your earnings.

Rule #3: Set Financial Goals Together

Once you’ve categorized your expenses and have a proportionate budget in place, it’s time to start setting your joint financial goals. If one of you is better at balancing the checkbook and making sure bills get paid on time, that person can be the one in the driver’s seat when it comes to handling those tasks. But you still both need to be on the same page when it comes to budgeting and saving. 

Talk about your goals, too. Are you saving for a wedding or a down payment on a home ? Do you have a dream vacation coming up? How do both of your retirement accounts look?  Make sure you’re using the websites above to track your savings progress, too.

Read the full article at: Kristen Cox, themuse.com

July 09 2018 By Kristen Cox, source: themuse.com Financial Planning