About 6 months ago my then girlfriend (now fiancé) and I bought a house together. Realizing this was a major financial decision we also decided to combine our finances. While we had been pretty open about money with each other up to that point, actually sitting down and going over all of our expenses was a different level of openness. But the benefits were unbelievable!
1. Openly Acknowledging Wasteful Spending
The first step we took was to go through all of our expenses and income to make sure we had everything identified. While this seemed simple, it turned into a much more complex exercise. By “coming clean” on all of our reoccurring expenses we were forced to openly defend our choice or realize the wastefulness of it.
“You’re spending what on video games!”-the girl
“You bought how many pairs of shoes?”-the guy
Nothing outside the normal, but saying it out loud to someone really makes you contemplate whether you need what you’re getting at that cost. Spending money on wasteful things is considerably easier when you aren’t accountable to anyone but yourself.
2. No More Worrying About Who Pays For More.
Four years into our relationship and there were still moments when one of us would passive aggressively point out that the other hadn’t paid for anything in a while. This would inevitably lead to a nice little debate where each of us would identify who had paid for what.
Inevitably the result ended up being that we were pretty much exactly equal to each other as far as spending. Combining our finances completely eliminated this disagreement from our lives and it’s been spectacular. We no longer exchanged a glance when the check came at dinner or wondered if we were going to get reimbursed for concert tickets that the other had paid for.
Instead, we knew that we both put the same percentage of our paychecks into our joint accounts, we had agreed to a budget for spending in key areas (leisure, utilities, travel, savings, etc.) and everything was equal. This may seem petty, but if you and your significant other are at all financially aware, I’m sure these thoughts have crept into your head.
3. Savings With Family Plans And Redundancy.
This was one of the biggest bonuses of combining our finances and probably the most obvious. Sure we could have gotten a cell phone family plan or combined our car insurance without combining our finances, but in my opinion, this would have only resulted in more complexity than benefit.
Also, locking into combined plans is a major step in relationship! (Asking someone on the second date if they want to get on a family cell phone plan is a little off-putting to say the least!) While we were reviewing our expenses we found a lot of areas that both of us were paying for that were redundant.
We saved a lot of money by eliminating one of our Amazon Prime accounts, savings on our car insurance, cell phone plan, and normal day to day purchases that we could assign one person to buy.
4. Combined Financial Strategy
We had had many conversations regarding money during our long relationship, especially when we decided to buy a house. But until we combined all of our finances, we didn’t really discuss planning as much as we should have. We also really couldn’t have a joint strategy together as easily until combining either. Once we had all of our finances outlined and setup we could discuss where we wanted to be financially in 1 year, 5 years, 10 years, etc.
We knew we were going to be getting married soon and that was going to be one big financial expense that we needed to plan for immediately. We also both knew we want to retire as early as possible. So we began to formulate a strategy based on our expenses and income that would get us to those goals as quickly as possible.
We began cutting things in our combined budget that weren’t worth delaying our financial goals for. We also made a detailed savings plan, one that would increase our retirement funds, maintain an emergency fund, and start preparing for things like the wedding, buying an investment property and a travel budget. Having an open conversation about this saved us countless back and forth and potentially years of savings benefits.
Efficiency was something we were aiming for going into combining our finances. I work in front of a computer all day while my fiancé works on her feet in a hospital. Clearly, I would have an easier time handling the day to day of our finances (paying the bills, monitoring our spending, etc.). I was already doing it for myself and the addition of her finances really didn’t add that much more work for me.
Taking away the work for her was like a weight lifted off her shoulders. While I could spend a little time at work managing everything, she had to tap into her precious free time to make sure her finances were being watched. Removing that burden from her gave her at least a couple hours a week back not to mention it relieved a ton of stress.
Being open and honest about money is one of the best things for a relationship. Combining finances shouldn’t be something you dread in a relationship but instead something you look forward to. It was a eye-opening experience for us and there are a lot of benefits to the process as well as the end result. I encourage all of you who are on the fence on whether to combine finances with your significant other to seriously consider it and begin having the conversation. I think you’ll find the benefits outweigh the cost!