What you need to know before merging finances in a relationship

As romantic relationships become serious, partners often must confront foundational decisions about organising their personal finances: should they merge finances or leave things separate?

According to a 2024 survey from Bankrate, 43% of Gen Z and 31% of millennials prefer to keep all their accounts separate, compared to 19% of Gen X and 18% of baby boomers.

Despite these changing views, many experts believe merging finances can lead to greater relationship satisfaction and overall wealth building.

The pros of merging finances

According to financial therapist Jane Monica-Jones, merging finances can build a sense of financial fidelity within the relationship.

"It fosters mutual goals, mutual understandings, and mutual trust," she says.

Merging financial responsibilities can also simplify managing household expenses and accelerate the achievement of common financial goals, such as buying a house or saving for a holiday.

"Plus, there's something quite comforting about tackling financial goals together, side by side," Monica-Jones says.

Burcheart founder and managing director Sacha Burchgart adds that merging finances can set up healthy money habits.

"Combine and conquer, especially in today's environment, is probably the best option," she says.

"It can be tricky for couples, but it doesn't have to be. Setting up an offset account for loans and having a discretionary allowance for each partner can keep spending in check."

The cons of merging finances

However, it's not all sunshine and rainbows. Differences in income levels can become more apparent, leading to potential disagreements.

Monica-Jones notes that it can also be challenging for one person to have to initiate a big conversation around the inequality of contributions.

"If one partner is a spender and the other a saver, clashes are almost inevitable," she says.

"Additionally, financial mismanagement by one partner can lead to significant issues, putting a strain on the relationship."

2020 Wealth director Leanne Bielik adds that merged finances can sometimes lead to one partner having too much control, resulting in financial abuse.

"This can make it very difficult for someone to put money aside to leave if needed," she says.

What to consider before joining finances

Before tying the financial knot, couples should consider their respective income levels and financial capabilities.

To do so, Lume Wealth director and senior adviser Morgan Hayward suggests having a relaxed discussion over a glass of wine.

"It's important to keep the conversation simple and goals-based," Hayward says.

"If the couple share the same goals, then it makes sense to merge finances. But if they have different goals, they probably shouldn't."

Monica-Jones advises partners to ask their significant other: "What have you done with your money in the past?"

Additionally, she says, discussing future financial aspirations can help align both partners' values and expectations moving forward.

Meanwhile, Glen Hare, founder of Fox and Hare, recommends that couples consider taking baby steps, like opening a joint account for shared expenses such as groceries and dining out.

As the relationship progresses, couples can gradually combine more significant financial aspects, such as saving for a house or investing together.

Protecting your financial independence

In almost all cases, experts recommend a hybrid approach where couples maintain separate accounts alongside a joint account for shared expenses.

"It's good to have some incomes and bank accounts combined, and then others to have a separate emergency fund for both parties," says Monica-Jones.

Hayward concurs: "Always keep a few thousand dollars in an emergency account for whatever life throws at you."

For those new to combined finances, Burchgart suggests a "both to sign" arrangement for larger purchases.

"This way, you can protect your assets more," she says.

Expert tips for merging finances

Open communication

The foundation of any financial arrangement is open communication. Discuss your financial histories, current situations, and future goals. Being transparent about debts, income, and spending habits can prevent misunderstandings down the line.

Set clear goals

Identify why you want to merge finances. Whether it's saving for a house, planning for children, or reducing living costs, having clear goals helps both partners stay aligned.

Create a joint budget

Develop a budget that includes all shared expenses. This can help manage finances more effectively and ensure that both partners contribute fairly.

Maintain some independence

Even if you merge most of your finances, keep separate accounts for discretionary spending. This can help maintain a sense of independence and reduce conflicts over spending.

Use technology

There are numerous apps available to help couples track their spending and manage their budgets. These tools can make it easier to stay on top of finances and ensure that both partners are informed.

Seek professional advice

Working with a financial planner can provide valuable insights and help you make informed decisions about merging finances. They can also assist in creating a plan that works for both partners.

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