To Pool or Not to Pool: Savvy Tips Regarding Finances & Your Significant Other
Whether you guys have been casually hooking up for the last couple of weeks, or you’re picking out china patterns together (does anyone actually do this any more? Point is, you’re living together, or planning to soon), chances are, you've noticed your partner’s financial habits. Do they coincide with your own? Or maybe they’re a spender and you’re a saver; can you make them coincide? (And if on the off-chance you haven’t noticed anything yet – start looking. Especially if you think there’s a potential future there.)
It’s probably not surprising that one of the top reasons for divorce in this country, right alongside communication breakdown and infidelity, is financial disagreements. So if you can solve that one before saying “I do,” then you’re already ahead of the curve. How do you start? Talk. (This will put you ahead of the curve in the communication department as well. Funny how that works, isn’t it?)
Talk about future plans and talk about past debts. Did your partner have to take on a hefty student loan to finish their degree? Have you stacked up a bit of credit card debt in the past few years, because times were lean? It might not be a fun conversation, and may even be embarrassing, but it’s one worth having. And if you do it right, it could bring you even closer, especially if you discuss long-term plans and future financial goals. Say you want to buy a house someday; it’s critical to acknowledge just how important your combined credit scores are, and it’s helpful to know now if you’re partner’s had trouble with plastic in the past. You guys can work together, starting with small goals at first – no credit cards on date night for example; cash only! This will help your buying power tremendously when it’s finally time to go house hunting.
You don’t have to determine everything from one conversation (whether or not to pool finances once you've tied the knot may take some negotiating), but it doesn't hurt to see where your partner stands relative to yourself. Though it might sound daunting, there are perks to establishing a joint account. Of course, there are also perks to maintaining separate accounts.
If there’s a huge income disparity between the two of you, or if one of you has a notorious spending habit, it’s not a bad idea to put the saver in charge of finances, at least until your mutual financial goals are reached. But if you’re both in fairly the same income range, and neither one of you has to give everything but their first born child to Miss Sallie Mae, then pooling finances may not be a bad idea, as it will greatly diminish the headaches that can come from trying to figure out who owes what when.
A reasonable compromise that seems to work for most young couples nowadays is maintaining separate accounts and having a joint account for things like bills, date nights, and vacations. Another reasonable compromise could be to pool finances, but agree on a set amount (say $100) that you’re free to spend without consulting your partner first. If you want to purchase something that’s more than the pre-determined stipend, it’s time to chat. This system also seems to be fairly successful, as if gives you the freedom to buy what you want (or most of it, at least) without hurting your savings plan. But if you look closely you’ll see that neither system is superior, and they both rely on communication.
Ultimately, the success lies in communicating with your partner, not in choosing a “foolproof” system. Let’s be honest, is there really such a thing? You don’t have to agree on everything, but it’s not a bad idea to recognize potential disagreements early on, and establish ways to cope with them when they do arise. But we've all got deal breakers of course, and if a point of tension serves to be too much, don’t be afraid to walk away either (how about wearing socks in the sack – and nothing else. Deal breaker?). You can compromise on certain issues in your relationship, but never compromise yourself. Trust me. You don’t need to. You’re awesome just as you are.