When you’re in a long-term partnership, your successes are your partner’s successes. Their debt affects your life, and vice versa. And an income boost for one can raise the quality of life for both.
So should you go all the way—and officially combine your finances?
The answer is “it depends”—on both parties’ debts, incomes, and individual attitudes about money, among other things. Here’s a look at the pros and cons.
Pros: why you should join financial forces
It makes life simpler
You don’t have to do any math or divide up any expenses. There’s no need to agree on who pays which bills or who contributes more on a bill. You have one account, and you pay everything from that account. Problem solved.
It allows you to take risks
When you have one bank account between you, either partner may feel more secure to take time off work—to care for a child, return to school, start a new business, or take another risk that involves an interruption in income. During this time, the earning partner can cover all the bills.
It forces you to solve problems together
For some couples, joining finances can feel like a very tangible expression of a partnership—a statement that what’s yours is mine, and vice versa. It also means couples have to work together to a greater extent to solve any financial problems that arise, and learn to communicate effectively about money.
You could pay off debt faster
The higher-earning, more debt-free partner can help the other partner in a variety of ways. With two of you contributing toward loans, you could be debt-free faster as a couple—and pay less in interest over the long run. If the partner with better credit co-signs on new loans, you’ll get better terms and interest rates as well.
Cons: why you should think twice
You may be liable for your partner’s debt
If you’re cohabiting, you usually won’t be responsible for your partner’s debt. If you’re married, it depends on where you live.
Nine states currently have community property rules, in which both partners are responsible for loans taken out by either during the marriage. States with common law rules don’t put you on the hook for your partner’s debts, except in certain circumstances. These vary by state.
But married or not, if you decide to take specific steps to join your finances—such as by cosigning on a loan or paying your partner’s debt through a shared account—your finances may be at risk if they default.
You can’t always spend your money as if you were single
With a shared bank account, every splurge involves a conversation. And day-to-day spending habits might cause conflict, as one partner may get annoyed at the other’s spending or chafe under their strict budgets.
You may have conflicting long-term goals
Maybe one of you thinks you should live frugally until all your debt is paid—while the other would rather live well now, and pay off the debt slowly.
If you don’t agree about your big financial priorities, those disagreements are magnified when you share finances.
Uneven finances can cause resentment and guilt
It’s reasonable for these feelings to crop up on both sides when one partner is contributing significantly more, or when one has a lot more debt than the other. This can lead to serious arguments, especially if you also have differing ideas about how to handle money in the short and long term.
The best way to combine finances
There’s no right answer to the question of whether you should have a joint bank account.
Many couples take a best-of-both-worlds approach, where you have individual accounts as well as a joint account for shared expenses. This gives you more spending freedom, as well as the convenience of a single account for bills.
Even with this option, however, you’ll need to hash out certain things with your partner—such as how you handle debt as a couple.
Still, these conversations are worth having. Not only can they make your partnership more financially sound; they can also make your bond stronger.