There is a big difference between looking after your own finances while living alone, or with parents, and living with a partner. The transition can be very difficult, especially if both partners are strongly independent, or one partner is financially weak and the other strong. In fact, it is an area of a new relationship that has many pitfalls if you do not set the ground rules from the start.
It is best to sit down together and quietly plan your finances, even before you get married or move in together. Then, when you do so, it is important to be open with each other, and discuss what may go wrong with the domestic finances if you do not plan correctly. That way, you can work on a plan together, and a budget, and set ground rules for a smooth financial future together. It is sensible to bring the use of credit into that discussion, as there will come a time, maybe from day one, when credit cards and other forms of credit become an issue. Agreement on all relevant credit and finance issues will reduce the risk of problems, arguments and misunderstandings later on.
An early decision to make is whether to keep finances separate or not; deciding, for example, whether to have joint bank accounts or joint credit cards.
The Benefits of Joint Accounts
The advantages of consolidating funds into one current account include:
1. Easier record keeping.
2. Should you apply for a loan at any time, there will be less paperwork.
3. Working closely together on the running of the account may help to solidify the relationship and build trust. It gives an opportunity for both of you to bring out your best co-operative nature.
There is one drawback, though. With two people actively using the account, it is not so easy for you to keep track of the account transactions and balances, especially if you are both using the account a lot. This can be overcome by discussing openly all expenditure the day it happens.
The Benefits of Separate Accounts
Keeping separate accounts will allow each person in the relationship more freedom: each will not need to check with their partner over every purchase. In addition, having separate accounts may create fewer complications in the relationship. It will allow them to maintain a sense of independence, and this can be very important to some relationships.
One negative to a joint finance arrangement is that it can seem unfair. If one partner earns
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