Talking about finances in a relationship can be tricky—even when you’ve been together a long time, talking about money can make people awkward and defensive. But if you live together and want to build a life together, it comes up—in part because, on a basic level, you’re going to need to figure out how to split the bills with your partner.
The answer will come down to how you view your relationship. “The first question to ask yourself is, ‘Do my partner and I plan to approach our life as a team?’ ” Priya Malani, cofounder of Stash Wealth, a wealth management company, tells Brides. “Once that question is answered, it’s much easier to decide ‘the best way’ to split bills with your spouse. For most couples who are planning a life together and view themselves as a team, the best way to split bills with their spouse is to not split them at all.”
That’s right—Malani says the best way to split the bills involves combining your finances. That might sound intimidating, but when she breaks it down it make a lot of sense. She also mentions that there are situations in which you may want to adjust this method, for example, if one of you has a child from a previous marriage, if there’s a prenup, or any outstanding fact that means you want to tweak this set-up.
But if you’re ready to handle your bills as a team, here’s what you need to remember.
Things Change Over the Course of a Relationship
The beginning of a relationship is obviously different than being in a marriage. When you’re first living together, you’re most likely to be splitting the bills down the middle or splitting them based on each of your incomes—and that’s fine, for a while. “Sometimes when couples come to us, they are splitting the bills in proportion to their income,” Malani says. “The person who earns less, pays a smaller percentage of the bill. While this may work in the early stages of a relationship, it can become very tedious to manage and cause unforeseeable issues down the road, including making decisions about what each of you value and want to spend money on.”
The problem is, a lot of couples don’t move out of these modes. “At Stash, we’ve seen it all!” Malani says. “Couples married five years, still Venmo-ing each other for the mortgage. I promise you, there’s a better way!” So when you’re married—or when you’ve been together a long time—you want to start thinking about your money differently. “We encourage married couples to view themselves as a team. Which allows you to get on track for your financial goals (including paying the bills) faster and more efficiently.”
Why? Well, ultimately it’s about cutting out that stress. “While you don’t need to see eye to eye on everything (see more below on ‘side stashes’), thinking as a team prevents the inevitable nickel-and-diming that will derail long-term success. Remember 70 percent of couples fight about money more than sex! No one needs that kind of stress!”
Merging Your Lives—and Your Money
OK, so if you’re ready to take that step in a relationship, meshing your finances are easier than you think. Malani says that the best way to split bills with your partner actually boils down to two key steps. Here’s how she breaks it down:
Set up a joint checking account (scary, I know). But you’ve already committed to spending the rest of your life with this person, so we’re well past the fear of commitment.
Redirect both your paychecks into this newly established joint checking account.
Voila. It really is that easy—as long as you actually use the new account. “Consider this new checking account the headquarters for your financial life,” Malani explains. “All the money flows into it and all bills/expenses/savings come out of it.” Not only does she believe that this will increase your transparency and clarity, it should also keep stress and awkward money conversations to a minimum—which is especially useful if one of you is always reminding the other what they owe.
That Doesn’t Mean You Can’t Keep Money Aside
But, if you’re anything like me, the idea of having all of your money shared will make you clench up in a hurry. That’s OK—Malani is not talking about merging all of your finances, but having some of them merged to deal with shared expenses and splitting the bills. If you want to have your own secret stash, that’s fine too.
“From time to time, we each want a little money of our own that we aren’t accountable for,” Malani explains. “For couples in this boat, we set up something we refer to as 'side stashes.' Ideally, this would be an individual checking account in each of your names. Each month, we suggest automatically transferring a predetermined amount (usually a few hundred dollars) from your headquarters into each of your side stashes. We dub your side stash as #judgementfreezone. You can spend this money on WHATEVER you want, and your spouse cannot pass judgment or opinion.” And, as she points out, it’s a great way to buy gifts for your partner without them seeing it come out of the joint account. It also helps provide a feeling of autonomy in relationships where you want a little more space or independence.
Money can be such a source of tension in a relationship, so it’s important to streamline things as much as possible. Even if you keep separate accounts for your private spending, consider a joint account for bills and other shared expenses. You’re building a life together, so a joint bank account should not seem too intimidating—and if it can save you from silly fights about money, it’s totally worth it.