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Couples Should do This Before Combining Financial Assets

Partnering up on the money side of marriage makes sense- but there are risks.

One anniversary that newlyweds likely will never celebrate is the day each spouse agreed to share their finances.

That’s because money and romance only co-exist as a commercial enterprise – think Valentine’s Day, birthdays, and the major annual holidays. After all, Cupid aims his arrows at hearts - not bank accounts.

From a relationship-strengthening point of view, however, combining spousal incomes is a big deal. No longer do individual partners get to make big financial decisions on their own, and no longer can spouses hide big financial problems from one another, as a shared bank checking account exposes all financial secrets.

By and large, romantic partners and married spouses understand the stakes in pooling financial resources. A 2020 study from NerdWallet reported that 77% of significant others at least partly combined financial assets, although the number shifts based on the couples’ age group.

When to Decide

For couples who are reluctant to agree on combining assets, the actual conversation to partner up, money-wise, isn’t as difficult as one might think.

“When money conversations are commonplace in a relationship, broaching the subject of combining financial assets shouldn’t be difficult,” said Sunnybranch Wealth founder Katherine Fox. “Many couples are already having conversations about money before marriage comes up, including discussions over splitting shared expenses including date nights, rent, and groceries.”

Combining financial assets is a logical outgrowth of these initial conversations.

“The easiest way to broach the subject is to ask one simple question - “have you thought about how we will combine our finances when we get married?”, Fox said. “If the answer is ‘no’ for one or both partners, take time to reflect individually and then come back together to share ideas and consider options.”

“For couples with divergent ideas on how money and marriage should look, a skilled advisor or financial therapist may be a good next step before walking down the aisle,” Fox added.

To prevent trouble after the knot is tied, money experts recommend discussing finances before the wedding day.

“Doing so is just like discussing honeymoon plans, relationships with soon-to-be in-laws, and whether or not to have children,” said Kirker Davis law firm founder Holly Davis. “It's all part of planning to share a life together.”

If you're already married, discussing marital assets is certainly not too late.

“Many couples even do a post-nuptial agreement, instead of a prenuptial agreement -- it's becoming more common,” Davis said.

Knowing the Upsides and Downsides Leads to Better Money-Merging Decisions

Perhaps that number would rise even higher if both parties in a romantic relationship knew the exact “pros and cons” associated with commingling marital and partnership assets as one.

Here’s what money experts have to say about merging partner assets – for better or worse.

Combining Romantic Partner Assets: The Pros

Simplicity. By commingling financial assets, couples don’t have to decide who is paying what bill or how to split costs. “All of the money is going in and out of the same pot,” said Sofi certified financial planner Kendall Clayborne

Transparency. By merging assets, there are no surprises, both partners are able to keep an eye on spending, income, and savings.

Less tension. Couples can breathe easier - and argue less – when they know where all the relationship dollars line up.

Combining Romantic Partner Assets: The Cons:

Unequal balance. Risks come into play with combined financial assets. “That’s especially the case if one spouse brings more assets into a marriage, there could be some contention there,” Clayborne said. “The same goes for one partner bringing more debt into the marriage.”

Feeling constrained. If you’re used to handling your own finances and not having to discuss purchases with anyone it may take some adjusting to get used to asking permission before.

Less control. “By sharing all assets, you bear the consequences of any poor financial decisions your partner may make,” Clayborne added.

No matter where you land on the issue of relationships and money, make sure to have a conversation with your partner to determine what will work best for you.

“Remember there is no right or wrong - each relationship is different and the way that you manage money may also be different,” Clayborne said. “The most important thing is to make sure that you still discuss financial matters and make the decision together.”