It can be wonderfully romantic to finally find a partner you know you will spend your life with. With the romantic decision to live together or get married, however, come some unromantic considerations. You need to make up your minds about how you will mix your finances together, for example. You may feel much more comfortable decorating your home together or planning a vacation together. Deciding how you will roll your retirement accounts into one, or pay the balance on your joint credit card, can feel boring and mundane.
Nevertheless, these are the kinds of issues that you need to plan for. While you don't need to make up your mind about all these details all at once, you should be aware that there are questions out there to seek clarity on. If you're moving in together, start talking about how you will contribute to joint expenses, for example. It would even be a good idea to talk about what each one of you thinks about credit scores, debt, spending habits, saving and making money, while still dating.
If your initial conversations about a joint financial life together go well, there are a number of other steps that you'll need to take before you can start pooling your money and making joint deposits and withdrawals.
To begin, make sure that your own financial life is in order
Combining finances with a significant other can help you improve your own finances -- you would have two incomes between you. However, it's important to not cut yourself too much slack, now that you have financial security.
Before you seriously consider opening a joint checking account, you need to make sure that your own financial house is in order. You should begin saving for your retirement, have an emergency fund, and get your credit rating to a decent level. It wouldn't be fair to your partner to drag them down with your poor finances.
Make sure that you know that your partner's financial house is in order
As important as it is for you to achieve financial health before you live together and get married, you also need to make sure that your partner does the same. You need to sit together with them, show them how your finances are in good shape, and tell them how you want to see proof of the same from them. Discuss income, expenses, debts and assets, and credit scores.
While these may seem like unromantic details to discuss, and you may even be ashamed to ask your partner about their finances, you need to think about how glad you will be when you're married, and you don't need to worry about a disastrous credit score and a careless spending habit.
Discuss your spending styles
Even if you decide to only spend on yourself with your own paycheck, you need to remember that the spending decisions of each partner impacts the financial health of the couple. Do the two of you like to save or spend? Does one of you believe that hunting for discounts is important, while the other doesn't? Do you have a brother whom you would like to give money to on a regular basis, even as your partner sees it as a waste of money?
You need to have a frank discussion about your individual financial priorities and find out if you're compatible.
Talk about your long-term goals
Where do each of you see yourself when you think about the future? Do you think about marriage, a comfortable retirement, travel, children, caring for the environment, religion and spirituality, or rising to great levels in your careers? If you have incompatible goals in life, they are likely to reflect on your finances.
A partner who cares about the environment might not mind spending a lot on organic food, for instance, even while the other partner sees it as a waste of money. If one of you wants one child while the other wants three, it would have an effect on your savings. It's important to discuss every goal that could affect your finances as partners in life.
Consult a professional financial planner
Even if you do read about how people need to discuss their finances before they merge them as a couple, it can be easy to take such advice lightly when you haven't personally experienced the complications that come about without discussions.
The most effective way to merge your finances is to hire a financial planner, real or virtual, and have them walk you through all these steps, and more. When you have a financial planner guiding you, you can be sure that there will be no unpleasant surprises in store for you when you finally do live together with joint finances.