Joining finances with a partner (who is not yet a spouse) can involve different things for different people. It might mean purchasing a home together and having a joint mortgage, opening a shared bank account to pay bills, or simply having joint savings account for the future. I can honestly say I never thought I would reach the stage in my life that I would feel comfortable having a bank account to which another human being also had access. My love of money and distrust of others had forbidden it…and yet here we are.
Whilst myself and my partner are not married we have been living together for about a year. More accurately, I live in her house whilst my property is rented. As she pays the mortgage and has an offset account, I have decided it makes the most sense for me to sit my savings into her account. That way it will be saving her in interest costs each week and therefore increasing how quickly she may be able to pay off the loan. This sort of trust is certainly no easy feat for me and there are some things to take into consideration when giving your partner access to any aspect of your finances.
- Money can change people, especially during a relationship breakdown. You might love your partner and have the best relationship in the world but it doesn’t mean that things can’t go south. Trust is definitely an important piece to joining finances however you shouldn’t hedge all your bets on trust alone. What I mean by this is, that you both need to have full access, oversight, and ownership of the shared bank account. Even if (as in my case) it is not your original account. At a moment’s notice, you need to be able to transfer your portion of the money back into your personal account if you ever need to.
- Keep separate personal accounts. Even though the offset account might be the only account saving you any money (let’s face it interest rates on everyday savers are paying a pittance at the moment) you still need to keep a personal account that is separate. I think this is relevant even if you are married. It definitely is a good idea to have individual accounts as not just a safety net but also a way for you to enjoy your money without needing to explain your purchases to your spouse every time.
- Agree on what the joint account is to be used for. If you are someone like me who could not handle seeing multiple incidental purchases coming out of a joint account then you probably should have a clear agreement with your partner to avoid potential problems. Our joint account is now only used for mortgage payments and as a savings account. No online shopping, no takeaway or nights out, it is there to be seen and not touched.
Combining finances, whether that is through opening a joint account, putting your savings in your partner’s offset account, or having a mortgage together is a big step. It is important that you are comfortable and not pressured into doing anything that you don’t feel the relationship is ready for. There are potential financial risks especially if the relationship breaks down or you are dating someone who has been known to be financially irresponsible. There is also the risk of financial abuse if you do not have full oversight and control of your money.
On the other hand, moving forward in your relationship as a couple with combined finances can be beneficial to you financially. You have more earning potential, fewer household expenses as everything is shared or you might be saving more interest from your offset account. All of these things are important to take into account when working out what is the best financial plan for you and your partner.
