NEWS
4 Tips for Combining Finances with Your Partner
If you’re in a long-term committed relationship, you may contemplate combining finances with your partner. Maybe you’re getting married, moving in together – or both. Or perhaps you already share expenses like rent, groceries, and utility bills – and life would be easier if you pooled your money together to cover such expenses.
Whatever the situation, combining finances comes with many considerations and complexities. As with most things related to money, it helps to have a plan. Here are a few pointers to keep in mind:
Communicate early and often. When it comes to relationships, you’ve probably heard the advice that communication is key. This adage holds true when combining finances, as well. In addition to sharing information about your cash, investments and other assets, be transparent about any existing debt you and your partner hold – whether from college loans, credit cards or other liabilities. You owe it to each other to be upfront about the mix of assets and obligations you’re bringing into the relationship.
Next, discuss your spending habits, goals, and feelings about your current financial situation and aspirations for the future. Even if you and your partner agree on most things, you may find that you have clashing views on money, particularly if one partner earns more money than the other, or if your upbringings were markedly different. Getting all of this out in the open early can help you manage your differences and work better as a team.
Choose your insurance coverage. Insurance policies can provide a layer of protection over your finances and may help you feel more confident about your ability to handle unexpected events. Make it a priority to review your individual life, disability, health, car, and home insurance policies before deciding what coverage you would like as a couple. If either of you receive benefits through an employer, pay attention to the qualifying events and dates for when you can change your elections.
Update your beneficiaries and will. Thinking about what happens if one of you passes away may not be romantic, but it is an important step to protecting your loved ones financially. Discuss with your partner how you’d like assets to be divided and consider formalizing your wishes in a will. Also, update beneficiaries on your financial accounts (e.g., checking, saving and retirement accounts) and assets if necessary. This is especially important if you were previously married and have your former spouse listed as a beneficiary. In the same vein, if you want your partner to share ownership in any vehicle or property you own, update the titles accordingly.
Set goals together. Now that you’re earning, spending and saving to support your life together, why not formalize the dreams you share for your future? Set aside time to discuss your short- and long-term goals, such as buying a house, pursuing higher education or retiring early. Bringing in the expertise of an experienced financial advisor can help pave the way as you work to achieve your biggest priorities – together.
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Michael D. Lanuto, CRPC®, AWMA® is a Financial Advisor with S.M. Miller & Associates, a private wealth advisory practice of Ameriprise Financial Services, LLC. in Albany, NY. He specializes in fee-based financial planning and asset management strategies and has been in practice for 7 years. To contact him: 518-949-2039; 4 Atrium Drive, Ste 200, Albany, NY, 12205; Michael.Lanuto@ampf.com; https://www.ameripriseadvisors.com/michael.lanuto/lp/request-contact/3/.