Joining your finances together.

Moving in with a new partner is a big decision. It comes with a lot of smaller decisions to make, from splitting the chores to choosing which coffee plunger to keep. On top of all that, living together requires making money decisions: How will the expenses be split? How will you agree on what’s fair? And will you keep your finances separate, combine them completely, or do a mixture of both?

When you’re living with a partner and sharing expenses, a joint account has one major advantage: convenience. Instead of trying to split utilities bills and pay a portion each, a joint account allows you to combine your contributions to the household budget one account to pay for the groceries, the power, and the rent, for instance. You can also set up direct debits and automatic payments from the joint account and use it to set aside money for joint purchases like date nights or buying new furniture.

It’s important that both of you understand where your money is going and how to access it, even if one of you is more interested or skilled in managing the finances.

By cohabitating, living costs can reduce and with that comes the potential to save more, pay off debt faster and reach new financial goals. But making that happen requires cooperation: meshing two different spending styles and money personalities together isn’t always smooth sailing.

What’s your money personality?

Are you a spender or a saver? Or somewhere in the middle? Sometimes couples can have a mismatch between their money personalities. Talk about your individual financial goals and how you use your money now (and be honest and realistic) and how you’d like to use it in the future (be aspirational but realistic). By understanding your partner’s money personality and financial priorities, you can agree on a money management plan together.

Think about what’s fair

What’s fair will be different for every partnership. For some it might mean a straight 50/50 split of expenses. For others, it might be proportional contributions, for instance, you both contribute 30% of your take-home pay toward the housing costs. Or you might each agree to cover specific costs, I’ll pay the rent, you pay the utilities and groceries.

For example, a couple might want to each pay off their own individual debts, or they could consolidate them and make a single combined payment. You and your partner could sit down together and create a division that will feel equitable for both of you. Remember that this is something that can be reviewed and adjusted as you learn together.

Finding a balance between privacy and unity

Sharing your accounts means losing some privacy, while keeping your accounts separate means you may not be able to make the most out of your shared incomes. You’ll need to find a balance that works for you and your partner; you may not want them seeing every single transaction you make, but you might like to pool your resources and set financial goals together. Honesty is also important: secret accounts and hidden debts can quickly undermine trust. If you prefer the balance of some privacy and unity, consider a ‘pocket money’ account which is yours to use how you like, and a ‘shared expenses’ account where your shared costs are covered.

Honest conversations about money

Couples often have financial differences when they get together. It can be tricky to navigate the topic of finances when one partner earns significantly more, or one partner brings a big debt into the relationship. You also need to balance any unpaid work in the household. Talking honestly about finances regularly throughout your relationship will help money from becoming a problem.

Getting the right advice

In New Zealand, debts and assets can become relationship property over time (usually after three years) or if you get married or form a civil union. This includes the money you’ve accumulated in your KiwiSaver account since the relationship began. If you and your partner split, the debts and assets could be divided between both of you. That means it’s important to get legal advice about how relationship property laws could apply in your situation.

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