When you are deeply in love with someone, you want to spend most of your life with them. You’ll undoubtedly want to sit down and discuss what areas of your finances make sense to share at some time, whether you’re married or in a monogamous relationship.
While it makes sense to share the majority of financial commitments and expenses, there are some you might prefer to keep apart. Let’s discuss a few of those immediately.
ONE. CREDIT CARD SUCCESS You might enter into a committed relationship with someone or get married. While one of you has good credit, the other is heavily indebted on their credit cards.
Those of you with less-than-perfect credit can look into the best way to consolidate credit card debt and take steps to be more frugal with their purchasing. You should generally hold off on combining your credit card accounts for the time being.
You can apply for things like bank loans and apartment leases using whichever of you has higher credit. The other partner will be much more likely to be accepted for goods that you want or need as a couple, while the one who doesn’t have great credit can attempt to improve it.
2. FINANCES If you consolidate all of your assets into a checking or savings account when you get married or become committed to someone, that is an act of trust. Although there is no harm in opening an account and sharing it, it is usually wise to keep different accounts for each person.
Having separate savings or checking accounts in addition to your joint one does not imply that you are hiding information from one another. It makes sense to think of it this way: If one of you surprises the other with a gift for their birthday or your anniversary, they won’t be aware of the expense because they won’t see the money being taken out.
Additionally, keeping separate accounts is a good idea in case you two end your relationship. It’s feasible but probably not something you want to consider.
LIFE INSURANCE 3. Separate life insurance policies are a smart option as well. It makes sense for both of you to have life insurance policies with the other person listed as the beneficiary if you are committed to one another.
If you do that, you’ll both be aware that you’re leaving the other person and your family money you can use in the event of an unexpected death. Most people don’t like to consider about mortality, yet you never know whether you’ll get a shocking medical diagnosis or if a tragic vehicle accident will happen to you.
The fact that each of you has a separate life insurance policy demonstrates your concern for one another. You want to be able to support one another in case something unexpected happens.
KEEP SOME FINANCIAL THINGS DISTINCT You can merge your funds if you’re in a serious relationship with someone, but there are some situations where you should keep them apart. You’ll both want to name the other as the beneficiary on a life insurance policy. You should have at least one combined bank account in addition to your individual ones.
If one of you has stronger credit than the other, you are allowed to maintain two credit card accounts. The person with the less-than-perfect credit can put in some effort. The other partner can apply for new credit cards, personal loans, apartment leases, etc. using their stronger credit.
Couples that manage their finances wisely combine some of their financial affairs while keeping a few carefully chosen ones separate.