Pairing? How to Know When It’s Time to Consolidate Your Finances

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Money may not be a priority if you’re in love, but it’s worth serious consideration if you want a lasting relationship.

A partnership that pools resources and shares expenses can be very good for a relationship and for everyone’s financial well-being. However, different spending and saving habits can also be a source of lasting conflict for couples.

From a household financial management perspective, sharing a common bank account can make things much easier.

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“Money stresses people out,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth in New York. “In general, the fewer moving parts the better.

“If you pay bills and deposit checks to and from one account, it’s easy to see what’s coming in and what’s going out.”

This, in turn, provides a good basis for drafting a common budget and setting financial goals together. It also gives both partners a good view of each other’s spending and saving habits, and it can potentially highlight issues that need to be addressed.

Boneparth suggests that it’s best to find out about a partner’s spending habits, debts, and general financial situation sooner rather than later.

“Ideally you want to flesh it all out before you get married,” he said. “These things can create rifts in relationships.

“It’s about trust and honesty,” Boneparth added. “You have to solve problems, find solutions and support each other in these areas.”

What to keep separate and when

A joint bank account is one thing, but mixing investment assets, sharing real estate titles and other assets is another. While people can and should designate beneficiaries for investment accounts and other assets, pooling assets and accounts with a partner doesn’t always make sense.

Indeed, there can be a wide range of personal, financial and tax reasons why pooling assets or separating them is the best approach for a couple.

“There’s no one-size-fits-all solution; it’s a matter of individual preference,” Boneparth said. “There may be good reasons for keeping certain accounts separate and allocating assets and liabilities in different ways.”

The universal solvent for many of these problems is simply strong communication.

Douglas Boneparth

president of Bone Fide Wealth

For example, a person may have business interests, property, or an inheritance that they wish to keep separate from a relationship. In some cases, this could be to ensure that one spouse is not exposed to the potential liability that the other partner bears as a business owner or professional. In other cases, it may simply be the personal choice of one or both partners to manage their finances separately.

The context of amalgamation or separation of property is often considered under the guise of a prenuptial agreement before a legal marriage. Parents of a spouse, for example, may be concerned about protecting the assets they plan to pass on to their engaged child.

This process can, of course, be a source of friction and pain in a relationship, but it is essential to address these issues beforehand and to resolve any emotional problems.

The only way to ensure that spending, saving, earning, and inheriting money doesn’t become a conflict issue in a relationship is to put it all on the table and talk it over.

“The universal solvent for a lot of these issues is just strong communication,” said Boneparth, who is married himself. “That’s what makes a good relationship overall and a good financial partnership in particular.”


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