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Merging Finances When You Begin a Life Together

By Bennett Whitlock, CRPC®, Private Wealth Advisor

When a couple makes the decision to bring their lives together, it’s inevitable that their financial lives will
become intertwined. It’s more common for couples to choose to marry or live together at a later age than was typical for previous generations. Also, couples may be coming together after one or both partners went through a divorce. In situations like these, both individuals are often bringing more financial assets and their own financial priorities into the relationship. Here are key topics that every couple should discuss before merging their finances:

Income and expenses
Individuals who are used to managing their money may want to maintain their accounts or have separate accounts for discretionary spending. If this is your preference, have a plan for who is responsible for each expense. Opening a joint account that both parties contribute to is a common way to pay for shared
expenses. If you decide only to have a joint account, discuss how you’ll handle discretionary spending. Many couples agree to discuss any purchase made above an agreed-upon amount, so both partners feel involved in the decision.

Existing debts
If one or both of you is bringing debt to the relationship, it is important to agree on how those will be paid off. Will you both contribute to loan payments, or will the person who brought those debts to the relationship take sole responsibility? Reducing, and eventually eliminating, these debts should be a priority.

Emergency fund
Create a sufficient cash reserve to meet emergency or special needs (i.e., travel or investments). A general rule of thumb is to have six to nine months of income set aside in a cash account that is easily accessible. If both individuals earn income, both should contribute to this joint household account. Clearly communicate what type of expenses warrant dipping into this fund to avoid a potentially stressful situation.

Financial priorities
Before you merge your finances, talk about your financial goals and dreams. Consider putting together a plan that prioritizes each goal and factors in your ideal timeframe. Talk about your spending habits, your approach to saving and how you will resolve disagreements about money. Be upfront about any issues you might have had with money in the past. Putting it all on the table at the outset can help avoid problems related to money matters in the future.

Bennett Whitlock, CRPC ®, is a private wealth advisor and managing director with Whitlock Wealth Management, a franchise of Ameriprise Financial Services, Inc. Learn more at or call 703-492-7732.

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