From moving in together to getting engaged, there are many monumental milestones in a relationship that signal a couple is taking things to the next level. But there's one turning point that's ostensibly bigger than any other: combining finances. Each couple likely feels differently about when the appropriate time is to tie themselves financially to each other, but according to financial experts, there is a key moment when you and your partner should to start to view "your money" as "our money." "The best time to discuss joint finances in a relationship is before moving in together," says financial coach Marco Sison. "This juncture is when joint expenses get real." Read on for more about co-mingling money, and for less optimistic turning points in coupledom, find out what experts say is The Exact Point Most Relationships Go Wrong.
Sison points out that there are a lot of essential questions that need to be answered before making any kind of financial commitment to someone. "Are the expenses split 50/50, or will bills be split accordingly to the person's ability to pay? Is money pooled together into one account and bills paid jointly, or does each partner pay their own bills?" he says. "There is no right answer, but the conversation has to happen before couples move in together."
If cohabitating isn't in your future, then there are other markers of when it's appropriate to combine finances. "The right time to consider it 'our money' would be when you are committing to financial obligations together. It can be signing a lease on your first apartment, buying a car, or even investing in something together," says travel and money expert Taima Ramsey. "You don't necessarily need to be married or even cohabitating. It should be triggered once a join financial responsibility arises."
Most experts agree that there are levels of pooling your money together, and those steps can be taken when you move in together, before, or maybe after, depending on the relationship. For many couples, creating a joint bank account is the first step toward fully combing finances. It's when couples each put a pre-determined amount of money into a shared account for joint expenses, whether it's household bills, dinners out, or rent. But combining finances fully means you're tossing the majority of your money together into the same pot, leaving very little designated as "your money" or "their money." Put simply, "combining finances is about combining forces, and working together towards common goals," says personal financial expert Brie Sodano. "A joint account is a way to store and spend communal money."
When paying for living expenses, it can feel like the obvious choice to have a single joint account to draw from, but combining finances too early could make things messy. "I think that splitting household expenses is fair when couples live together, but that is not the time to open joint bank accounts," says wealth advisor Lakesha Williams. "Many people don't know that opening a joint bank account makes you vulnerable to the other person's debts."
Williams says that couples should only join accounts after they are deeply committed and have had open discussions about their individual and collective financial goals and reviewed each other's credit. But even if all that checks out, she adds that it's healthy to maintain some financial independence at all times.
Financial coach Heather Albrecht agrees that it's important to protect yourself when combining money. "Nobody likes to think of a relationship ending, but when it's not a marriage—AKA legal agreement—then the lines can be much fuzzier as to who is the real owner of what," says explains.
That's why financial analyst James Jason believes that "a couple should think about combining finances when they have a union that is recognizable by law." "If the involved parties are not recognized as married partners, then the law might not [be able to] intervene," if needed, Jason points out.
But what if you decide to combine finances before you make it official with the law? "Make sure each person is named on any joint accounts, and have an agreement written down saying how you have decided to share these funds—who puts in how much or what percentage, and what it can be used for," says Albrecht. "The clearer you are now, the better you will be able to navigate any money disputes amicably."
So, whether you decide to join financial forces when you begin cohabitating, 20 years into dating, or somewhere in between, just be aware that the shift warrants a significant conversation to clarify all the critical aspects of sharing money. And to see how you can improve your relationship right now, check out Doing This on Your Own Can Strengthen Your Relationship, Study Says.