Ask These 7 Questions Before You Merge Finances With Your Partner

It’s not easy to talk about money, but that doesn’t mean you shouldn’t—especially if you’re looking to take the next step with your partner.

Some couples choose to merge finances after moving in together or getting engaged. Before you do so, however, it’s important to get your money matters out into the open. After all, financial disagreements are the second leading cause of divorce. 

With that in mind, here are seven questions to ask before you and your partner merge your finances.

As a starting point, both you and your partner should disclose salary information to one another. That means your annual salary before taxes, monthly take-home pay, and any bonuses you receive throughout the year. Combining finances means uniting your respective streams of income, and knowing how much you each earn lays the groundwork for budgeting and financial planning.

In addition to salary, you and your partner should know each other’s assets, the accounts and items of financial value owned by an individual. Besides your checkings and savings accounts, that includes stocks, bonds, cars, real estate, and even jewelry and electronics. 

“If you’re not married but planning on it someday, you should consider outlining each partner’s assets in a prenup,” Rachel Ryan from Legal Templates advises. “It may not sound romantic, but a prenup can act like a financial contract and help couples determine how to treat their finances moving forward.” Laying out what each of you owns helps to paint a big picture of your combined wealth and set expectations for spending and saving together.

There’s no avoiding this question, and for good reason. Before you merge finances with your partner, it’s imperative that you know whether your partner has any debt, and if so, the extent of that debt. From there, you can dive into further details, like whether you’ll handle it jointly or separately. Debt is financial baggage no one likes to carry—but the more transparent both sides are about it, the more prepared you’ll be as a couple to deal with it.

That is, besides retirement, what other goals is your partner actively saving for? This could be buying a home, going on a backpacking tour of Southeast Asia, or having an emergency fund. Regardless, knowing your partner’s short and long-term goals will further set the stage for financial planning, and can also get you both thinking about your financial goals together. 

“Not being on the same page when it comes to financial goals can be a big issue when sharing finances,” personal finance blogger Dustyn Ferguson notes. “For example, one partner may prioritize saving for a vacation while one may prefer to invest savings. This can lead to money going to places both partners don't agree with, which is obviously not good. Both partners need know what to expect when it comes to spending and saving before merging."

Ask about your partner’s credit score and history. This information matters because many institutions factor it in when deciding whether or not to do business with you. That includes banks, insurance companies, landlords, and cable and internet providers. Some employers may even review credit history before hiring and promoting people. 

If your partner’s got a history of late payments or anything else that may cause a low credit score, it’s worth knowing about beforehand rather than being caught off-guard.

It’s possible you don’t need to ask about this one if you’re already well acquainted with your partner’s money-handling habits. Of course, it doesn’t hurt to double check. 

Consider the following: How often does your partner eat out? What about entertainment—for instance, going to the movies or out to a bar? Is he or she an impulsive shopper, or someone who prefers to think over every purchase? Also, don’t forget any hobbies that your partner may spend on. Even if you have the same financial goals, differences in your spending lifestyles could cause problems if not addressed ahead of time.

According to David Bakke from Money Crashers, “It's quite rare when couples merge finances and nothing changes as far as spending habits, planning, organization, and many other aspects.” In other words, don’t expect combining finances with your significant other to go smoothly; merging your accounts requires both effort and compromise. However, while financial woes can strain any relationship, open communication ultimately helps to mitigate these issues.

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