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should I combine finances with my
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partner this is the question I get tons
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and tons every single week how do you
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know whether it's the right thing to
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combine finances how do you even do it
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well let me tell you that my wife and I
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have combined our finances it has made a
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huge difference in living our rich life
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together so in this video I'm going to
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show you when to start talking about
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money with your partner how financially
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successful couples talk about money and
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if you should combine your finances
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first up the three best times to start
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talking about money now there's a lot of
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opinions about when it's best to start
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talking with your partner a lot of
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people in the personal finance world
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will tell you date one make sure you
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bring it up pull out your Roth IRA show
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them how you allocate your Investments
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and I just say to myself have you people
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ever been on a first date what is wrong
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with you this is not how you have a nice
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seductive fun date no do not pull out
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your Vanguard funds I know you have a
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.7% expense ratio it's so cool I love it
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too don't talk about it on your first
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dat there'll never be a second one
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instead there are three natural pivotal
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moments in a relationship where it makes
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a lot of sense to talk about your money
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first up going on your first trip if the
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two of you decide to go on a trip
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together when you're dating you might
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say something like hey I'm really
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excited to take our trip together what
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do we want this trip to look like what
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we want it to feel like how can we
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prepare for it and as you get talking
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about it you might ask you know what are
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your financial expectations around this
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trip here's how I'm thinking about it
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next up moving in together in this
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example you could say I'm so happy you
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asked me to move in with you I think it
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would be a really good time for us to
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talk about how we'd like to handle money
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together at this point a lot of people
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continue to keep their money separate
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which is totally fine but there will be
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joint expenses and moving in together is
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a natural time to start talking about
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those joint expenses including how you
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want your money to flow next getting
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engaged now here it would be a great
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time to talk about how you want to live
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your life together and how you're going
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to use money to do that for example you
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might say something like now that we're
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engaged I would love for us to sit down
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and talk about what our rich life is and
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part of that is going to be discussing
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combining your finances and if you're
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going to do that how you're going to do
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that but I'll get to that a little bit
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later in this video just remember when
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you go through these moments it's a
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natural time to talk about money here
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are some other times you should bring up
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money getting married deciding if you're
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going to have kids any big life
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decisions such as going back to School
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moving changing jobs and of course after
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you're married talking about who's going
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to be in charge of certain parts of the
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money now regardless of your living and
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your money situation I would encourage
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you to talk more openly about money A
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lot of times people believe that money
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is something they should not talk about
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they should protect their partner or
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protect their children from it I see
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money as something that is fuel for your
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rich life it allows you to take trips or
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eat certain types of food or be generous
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generous and charitable that is why your
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goals and your financial situation might
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change but your communication skills
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that's the important thing get into the
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habit of talking about money now so that
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as your goals change and your income
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increases it's going to be a lot easier
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down the road by the way it is a huge
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red flag if your partner will not talk
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about money with you here's why
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financially successful couples talk
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about money regularly not just when
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things go wrong and often we are
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programmed to think that money is a
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taboo topic that we avoid it and walk on
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eggshells until somebody overspends or
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something bad happens I don't like that
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for most of us money has become
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something that's reactive we only talk
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about it when there's a problem why'd
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you spend that much how are we going to
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pay our bills this month problem problem
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problem and as you start to develop that
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connection you start to connect bad
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feelings with money but I like to
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connect good feelings also I don't mind
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if someone has debt for example I don't
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even mind if someone made a financial
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mistake
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but they've got to be willing to talk
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about it with their partner that is why
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I want you to start talking about it
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regularly when things are good when
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things are bad when you just need to
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reconnect about money which brings me to
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how to talk about money without fighting
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my wife and I found it really hard to
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find specific advice on how to talk to
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your partner about money and we really
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looked everywhere when we started
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talking about it most of us grow up not
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learning how to manage our own money let
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alone how to talk to a partner about it
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the advice was pretty generic have the
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conversation get on the same page okay
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just tell me the words I literally want
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to know the words what should I say and
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what should it sound like that's what I
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needed so I want to give you some
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specifics here as well first of all step
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one bring up the money subject if you're
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worried about bringing the topic up
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start off a little slow hey I've been
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thinking about personal finance a lot
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I've been following this guy RIT Sati
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and I would love to get on the same page
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with you you think we could talk about
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money in the next couple of days now if
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you don't get an answer try a more
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specific approach you know I'm really
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curious how do you think about money
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like some people like to spend a little
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bit more on food other people have a
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savings account I think I overspend on
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eating out frankly but what are your
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thoughts on money notice that what I did
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with that was I started off broad I
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offered examples and then I offered a
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confession a little vulnerability about
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an area I'm not great in and I would
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encourage you to do the same thing start
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off by being a little bit vulnerable
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about your finances you might say
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something like how do you think we
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should use our money together like what
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would you want to change would you want
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to spend more on anything or less on
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anything this is where you can discuss
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if you're going to save towards joint
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goals or even what fun things you're
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going to use your money for notice that
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at this point we are not getting into
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the tactics of specific investment
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options we're not making each other feel
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bad about things you should have done
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the goal of these early conversations is
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just to agree that money is important to
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both of you and that you want to work
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together to create something beautiful
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together that's it give yourself a pat
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on the back end that conversation on a
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high note step number two set up a
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second meeting to talk about your
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finances in step one you both agreed
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that money is an important part of your
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relationship okay and you agreed that
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you want to continue that conversation
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well here we are at step two ask your
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partner if they'd be willing to sit down
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again to go over your finances together
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and at this point I'd like to see you
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embracing a little bit more preparation
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really bringing together a list of your
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accounts how much you have how much you
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make debt all that stuff now remember
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you are watching this you're probably
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more into personal finance than your
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partner your partner may not have ever
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watched my Netflix show or read my book
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or any of that stuff so you've got to be
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willing to be a little bit patient be a
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little gentle just ask yourself would
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you have cared about this 5 or 10 years
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ago probably not so be patient give them
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a little Grace now after you have
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prepared and of course you've let your
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partner know hey here's a few things I'm
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going to bring I'd love if you could
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bring some of those same things if you
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don't know any of these numbers that's
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totally fine just bring what you've got
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and we'll sort through it together right
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really nice really gentle then you are
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ready for the next meeting step three go
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into into detail about your numbers now
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I like this because in this meeting you
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can discuss specifics now the important
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part of this conversation is to
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normalize talking about money which is
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why we want to keep it as light as
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possible of course there are numbers
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maybe you just discovered that they have
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an extra $50,000 of debt all right we'll
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deal with that but you do not want to go
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into this and be like here's all the
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things you did wrong how could you not
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do that and why For the Love of God do
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you have an account at Primerica that is
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a piece of company well yes it is or
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Wells Fargo or Bank of America you
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should not you know what I take it back
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if you find out that your fiance has a
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bank account at Bank of America break up
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with them okay Wells Fargo kick him out
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the door say here's a garbage bag get
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out I'm not going to be in an intimate
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relationship with someone who's part of
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a predatory Bank get the out but
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besides those two Banks I really think
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that you can connect about money even if
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there's some surprise
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remember the next part of this
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conversation is for both of you to get
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to a baseline making sure that you
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understand what each other has are you
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saving are you investing how do you
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think about money now my wife and I did
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this with our finances first of all let
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me admit I did not follow my own advice
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I didn't bring up money as early as I
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should have so I take total
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accountability responsibility for that I
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should have done it but eventually
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because my wife reminded me hey I you
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know a lot about about my finances I
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don't know as much about yours I
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realized I had to follow my own advice
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so I did and then we started with the
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big picture how much we earn how much
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we'd saved and over the course of many
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many months in fact many years we went
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deeper into not only our money but also
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our attitudes towards money now it
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probably will not take you years to
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explore your accounts but to understand
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each other's attitudes towards money
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well you hear it on my podcast it takes
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a long time and that's okay the first
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thing I want you to do is to zoom out
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talk about your goals talk about things
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like what kind of Lifestyle do we want
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to live like what if one of you finds
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out you want to do subsistence farming
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in a freaking Barn again goodbye love
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you love you babe but I'm not living on
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a farm goodbye all right after you talk
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about your lifestyle what is our
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lifestyle do we want children what about
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vacations do we have elderly parents
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things like that then you can look at
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your monthly spending and I want you to
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keep an open mind here because it's very
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sensitive okay most people have never
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really took a structural strategic
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approach to their money they literally
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spend what's in front of them that's as
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far as most people go so be gentle right
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ask them things like like here's how I
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spend my money I'm curious what do you
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think I could be doing better it's a
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really nice way to be vulnerable and to
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open yourself up first to model that
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vulnerability and then hopefully your
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partner might say Hey you know what do
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you think about me next spend some time
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talking about your attitudes towards
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money how do you treat money how do you
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think about money one of you might say
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like I really want to save because I
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want to buy a house another person might
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say you know I actually never really
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thought about buying a house like I'm
00:10:44
totally cool renting one person might
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say I need $110,000 in my checking
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account to feel good another person
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might say wow where'd you get that from
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how did your parents talk about money
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use the podcast that I have as a guide
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to encourage you to open up about these
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money questions now you can get to all
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the complicated stuff like joining
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accounts later but in the spirit of
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keeping this conversation
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upbeat I want you to set up a few short
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and long-term savings goals such as a
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year-end trip and set up an automatic
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monthly transfer for each of you and
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make sure you set up your regular
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check-ins as well they can be bi-weekly
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monthly quarterly don't do quarterly it
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should be every two weeks or at the
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least once a month the key is you get
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together you have one hour carved aside
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you have an agenda yes you freaks it's
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normal to have an agenda in your
00:11:39
relationships so many people R sa what
00:11:42
an automaton he has a Google doc in his
00:11:45
relationship is so weird yes it's weird
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you know what it's weirder going 55
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years never talking about money because
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you thought it's weird to set up a
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Google doc set up the agenda compliment
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each other I love you you're so great
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you always plan the best trips give me a
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high five and give me a kiss that's how
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you start off a great money meeting the
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key here is to continually have these
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money conversations with your partner so
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that you are staying aligned on your
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goals okay now you know how now at some
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point in your relationship you'll start
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to question should you combine your
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finances the short answer you probably
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should there's good research indicating
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that you find better outcomes when you
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combine your finances including greater
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relationship satisfaction especially
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among couples with low household income
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now why does combining your finances
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lead to increased relationship
00:12:36
satisfaction well you're going to feel
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like you're part of a team you're going
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to design a shared Rich Life vision
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you're going to be able to work towards
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bigger goals rather than how much money
00:12:46
can we afford to spend on bread and
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you're going to have support in case
00:12:51
something happens like one person loses
00:12:52
their job that's the beauty of a healthy
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relationship when things are good you're
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there and when things are bad you're
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also there now I will say it's not
00:13:02
necessary to combine your finances you
00:13:04
can also combine them at different
00:13:05
levels I know financially successful
00:13:07
couples who combine literally all of
00:13:10
their money I know financially
00:13:11
successful couples who have a joint
00:13:13
savings account they've figured out a
00:13:14
way to divvy up their money you can
00:13:16
choose your level but I do want to point
00:13:18
something out those who don't combine
00:13:22
their finances repeatedly tell me that
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they never really talked about money
00:13:28
they kind of just slid into being
00:13:30
together in other words because they
00:13:32
never really sat down to talk about
00:13:34
money they kept their money separate and
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now their money has been separate for
00:13:40
years typically I find that couples who
00:13:42
are in this situation probably got
00:13:44
married later in life they had their
00:13:46
established Financial routines when they
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met their partner they fell in love they
00:13:49
moved in they got married all that stuff
00:13:51
but they never simply said hey should we
00:13:52
actually combine our finances so they
00:13:54
often create these super complicated
00:13:56
systems well my partner pay pays for the
00:13:59
groceries and I pay for the utilities
00:14:02
but then I just got a raise and we
00:14:03
haven't talked yet about adjusting our
00:14:05
ratios and it's just a lot here's my
00:14:07
recommendation combine your finances but
00:14:09
whatever you decide the most important
00:14:11
part is that you continue talking about
00:14:13
money with your partner regularly
00:14:15
interesting topic is how should you
00:14:17
combine finances when one person earns
00:14:20
more than the other now let me give you
00:14:23
two ways that you can handle combining
00:14:25
your income if one partner earns more
00:14:28
than the other your first option is
00:14:30
proportional let's say for example that
00:14:32
your total household income is
00:14:34
$150,000 person a makes 50k person B
00:14:37
makes 100K and your monthly rent is
00:14:40
$2,400 how would you divide that shared
00:14:43
expense up well since person a makes
00:14:46
oneir of the total household income they
00:14:48
would contribute 1/3 towards the rent
00:14:49
which would be $800 then person B would
00:14:52
contribute 2/3 towards the rent which
00:14:54
would be
00:14:55
$1600 the rent is just an example of
00:14:58
shared expens expenses and you would
00:15:00
contribute proportionally so the person
00:15:03
making more would contribute more to
00:15:05
your shared expenses there's another
00:15:08
option which is simply combine it all
00:15:11
put the money together pay your shared
00:15:14
expenses each of you gets a little
00:15:16
percentage for your own no questioned
00:15:19
asked money and you move on I got to
00:15:22
tell you I like option two more and more
00:15:25
it's simple it handles edge cases like
00:15:28
when one partner gets a raise or one
00:15:30
partner gets laid off it allows support
00:15:33
and most of all it structurally focuses
00:15:37
you together you're no longer talking
00:15:39
about me and you it's we so I really
00:15:43
like the idea of combining your finances
00:15:45
together all while making sure that each
00:15:47
of you has a certain amount of money no
00:15:50
questions asked that you can do whatever
00:15:52
you want with it the key takeaway here
00:15:54
is to discuss it come to an agreement
00:15:57
that feels Fair remember 50 is not the
00:15:59
only definition of fair and then check
00:16:01
in every 6 to 12 months to make sure
00:16:03
this agreement is still working for both
00:16:05
of you I want to address one more thing
00:16:06
that I hear some people worry about when
00:16:07
they combine finances and that is what
00:16:10
to do if your partner spends
00:16:13
irresponsibly this is unfortunately a
00:16:16
very common complaint that I hear but
00:16:18
there is a way to go about handling this
00:16:20
and I can tell you it's not about
00:16:21
attacking your partner saying you spend
00:16:23
too much at Target when you keep trying
00:16:24
to tell your partner not to do something
00:16:27
you're going to evoke something called
00:16:28
reaction act it's like when you tell a
00:16:30
kid uh don't eat that pizza and they go
00:16:33
I'm going to eat the pizza nobody likes
00:16:35
to be told what to do kids or adults
00:16:37
alike no the solution here is to elevate
00:16:40
the conversation Beyond you and your
00:16:43
partner what do I mean by that you can
00:16:45
have a conversation about what your
00:16:46
savings goals are how much you need to
00:16:48
reach them you want to come to a plan
00:16:51
that you both agree on and then the next
00:16:53
time you have an argument about one of
00:16:54
you overspending you don't need to point
00:16:56
the finger at them instead you talk
00:16:59
about the plan you might say something
00:17:00
like hey I just want to check in with
00:17:02
you about something you know a couple
00:17:04
months ago we both agreed that we want
00:17:06
to have an emergency fund with $5,000 in
00:17:09
it and that means that we have to be
00:17:11
putting aside $250 a month to hit it now
00:17:13
I noticed this month you didn't send
00:17:16
your contribution in that means we're
00:17:17
short means we're not going to be able
00:17:18
to hit our goals now I just wanted to
00:17:21
check in not pointing any fingers but I
00:17:23
just want to understand what's going on
00:17:24
because we did create this goal together
00:17:27
right yes we did so can you tell me
00:17:29
what's going on is there something I can
00:17:31
do to help what you're doing here is
00:17:33
you're focusing on the plan and you're
00:17:35
reminding them you both agreed to it
00:17:38
it's a little harder than just saying
00:17:39
you suck why' you do that it's going to
00:17:41
feel like you're slowing down but it's
00:17:43
going to be so much more effective when
00:17:46
your partner Buys in because then you're
00:17:49
not going to be trying to pull your
00:17:50
partner drag them with you you're both
00:17:52
going to be rowing in the same direction
00:17:54
so focus on the plan not on the person
00:17:56
all right I hope this video helps you
00:17:57
have more fun positive conversations
00:18:00
about money with your partner because I
00:18:02
want both of you to live a rich life
00:18:04
together now check out this video to
00:18:07
learn more
