When merging households, it’s worth thinking about how you and your new sweetie can minimize finances and the stressors it can bring.
Divorce happens for a lot of different reasons, but one of the top causes is trouble with money. Entering into a new partnership, we are all (hopefully?) determined not to repeat whatever patterns didn’t work well last time.
(And yes, you should discuss finances regardless of if it was an issue in the past).
The Right Amount of Privacy
The most important thing, in any relationship, is open and honest communication. That doesn’t mean you have to tell your partner where every penny goes. In fact, that’s one of the things that can cause arguments.
I think it’s also important for each adult to have money they can spend without explanation. To quote our own Sara Stanich, “Rob doesn’t need to know what I spend getting my hair done.” She probably doesn’t want to know what he’s spending on his personal priorities either. I’m guessing that rocket launcher cost a pretty penny, but look how much fun it is!
If he paid for it out of his private account and she can stand seeing it where he put it, all she needs to know: “Is this covered by the homeowners’ insurance?”
Everyone has different values. Rather than try to come to consensus on every discretionary purchase, some freedom can save a lot of arguing. There are many ways to accomplish this.
Agreeing on the Big Things
If both parties earn income, maybe you each have your own bank accounts. You can also contribute an agreed-upon amount to a joint account for the shared expenses. If one spouse is financially dependent on the other, the earner could put an agreed upon amount into a separate account for the other.
Even if the earning spouse is covering all the shared expenses, like housing and medical expenses, it’s a good idea for the other partner to know what’s going on. This helps both with being in accord about how resources are allocated and in case the earning spouse becomes incapacitated or dies unexpectedly.
Merging Household Expenses
The shared, merged household expenses do need open discussion, both logistically and philosophically. We have seen lots of different ways to handle the logistical side.
Perhaps there is a joint account to which each partner contributes equally, or in proportion to their earnings. This account can pay for only clearly shared expenses – housing, utilities – or everything except personal splurges (apparently we do need one more iPad? Yes dear. I love you.)
We have also seen couples who have no shared accounts at all, and instead assign responsibility for each expense to one or the other partner. When everyone is on board, there are lots of ways to do it right.
Couples also need to agree, or negotiate an acceptable solution, on long-term financial goals. Discussing what dollars will pursue which goal can reduce stress. Say one partner thinks saving for retirement is Job 1. Maybe the other partner agrees. Maybe they think retirement is a million years from now and we should buy as much house as possible. A thorough, respectful discussion can help reach a compromise.
Priorities needn’t be exactly alike, but it’s important to be working off the same script. Discovering at tax time that your partner hasn’t contributed anything to their 401(k) when you thought they were, leads to a more stressful conversation than necessary.
Merging Households with Kids
Maybe you’re totally on the same page about your priorities – great! Very likely there are some differences. This is true in any marriage and only gets more complicated when combining families.
Maybe you each have kids from a prior relationship. Who’s funding college for whom? What if one kid gets an allowance and the others just get whatever they want by asking (Grandma?) for it? This can be a great opportunity to help kids learn that different families’ finances are different. It doesn’t have to be the same for everyone to get what they need.
But if they can skirt the system by going through the other adult in the house, you better believe they will. Bam. More stress. To help kids understand how things work in your house, parents need to be clear and present a united front.
This also comes up in revisiting your estate plan when you merge households. A friend of mine facing a terminal cancer diagnosis years ago found herself unexpectedly angry that her children would have no claim to the house where they spent most of their childhood after she passed away. It seems like this ugly shock could have been prevented with the right premarital agreement.
Prenups Aren’t Only for Stars
When I finished getting divorced, or at least my lawyer was finished with me, he said “Congratulations! Call us when you’re ready for a prenup.” I laughed, but then I realized he was entirely right. Of course I don’t want to go into another partnership already thinking about it ending. This is a common misconception about a prenup.
While making a subsequent breakup financially simpler may be their legal purpose, having the frank conversation in advance of combining and merging finances can help prevent the need for the document’s use. Knowing that you both have committed to certain terms that you found fair, or at least tolerable, can relieve a lot of anxiety about what would happen if the relationship ends, or even what it might be like the next time you and your partner need to have a difficult conversation about resources and goals.
Six years after leaving the father of my children, after alternating periods of rapid-fire dating app swiping and avowed monkhood, I found someone I thought would be worth trying again. He very patiently waited out my rants about not wanting some other adult in my house with opinions about how to load the dishwasher and won me over with his kindness, humor, intelligence, and beautiful eyes.
When You Fall in Love with a Financial Advisor: Geek Love is Strong!
We found a house to rent that was midway between our kids’ schools and would accept five humans, three rabbits, and a chihuahua.
- I had us each get a life insurance policy that would protect the other one from financial disaster should they find themselves widowed.
- I opened a joint checking and savings account for us. We each contribute an agreed-upon amount per month. His contribution is currently larger than mine, but he (repeatedly) reassures me that he is comfortable we are each pulling our weight. (It probably helps that I’m a great cook.) I do most of the bank administration, but we both know where the shared money is and can see where it is going.
Right now we are working on our prenup – or trying to, given that we can’t find an attorney who will believe that we aren’t arguing over it. We have been very open about our previous spending patterns and how much we are comfortable combining with the other; we have a plan for purchasing a house together, with a goal savings rate towards a down payment and each expect to fund our own retirement and our own kids’ educations.
His daughter seems to like me despite my declared Evil Stepmother Agenda (vegetables) and my kids adore him. And he lets me load the dishwasher however I want.
My fiancé and I usually reach agreement fairly easily about how to spend shared resources. For smaller things, we also each have the option of saying “well I want it so I’ll spend my own money on it.” It helps a lot to have this option.
He doesn’t need to know how many purchase and return cycles it takes for me to choose a pair of jeans, and he can buy all the bicycles and guitars he can afford for all I care. I love him just the way he is.
If you would like help navigating difficult money conversations, a financial therapist, relationship counselor, or financial planner might be just the ticket. Give us a holler! We are here to help.
 Yes I know she gets to stay up later than you do. I’m not her mom, I’m your mom. Now brush your teeth.
 Fun party trick! The calmest, most mellow of people will go into a fuming rant over how to load the dishwasher – try it and see.
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