Married? Merge the Accounts. Dating? Keep Things Separate.



 Barrel Christmas Tree

I’m a strong believer in joint accounts for married couples.  Once you agree to be one, there is no more his and hers.  Just ours.  Handling money well is important for a marriage, and money fights, along with kids, in-laws, and religion fights are prime reasons for divorce.  Beyond just financial security, how we choose to use our money shows where our heart and priorities are.  Monthly budget meetings are really the way a couple communicates about priorities, wishes, and dreams.  Life insurance is a way to say, “I love you and want you to be protected.”

When you get married, if you do it right, you also become a family (even if you remain at two).  It doesn’t matter who gets the paycheck, or the bigger paycheck.  The support of the spouse is what makes the paycheck possible.  Don’t believe me?  Try bringing a 2-year old with you to work all day, every day and see just how well you can concentrate and get things done.  It is because you are able to cover for each other that you can do so well.

That said, there are financial things couples who are not married, even if they are living together, should not do.  These include:

1.  Buy a home together, particularly with a mortgage.

2.  Put all of their money into the same account.

3.  Buy a timeshare together.

4.  Really, buy anything together worth more than $500.

5.  Get a credit card together.

6.  Sacrifice one career for the other’s.

7.  Get a pet together – OK, this one’s up to you.

The reason isn’t that you aren’t really in love or that things won’t work out.  It is just that often they don’t.  And unlike if you were married, when you’re just a couple and things don’t work out, you don’t have a judge to help you sever your financial ties.  If your ex decides to get back at you by running up the bills on the credit card, there is no way you can stop him.  If your ex decides she wants to stay in the house and not pay the mortgage, there is no way you can stop her.  There is also no alimony, so you’ll be on your own with a very old resume trying to find a job to eat if you gave up your career for his or hers.

So what is the alternative if you want to buy a home or a car using pooled resources but you don’t want to get married?  The best method is to have one individual buy the home or the car and the other pay rent to use it.  There is one name on the mortgage or the car loan.  If things work out and you eventually get married, you can always add the other name.  If they don’t, you can go your ways and not have to worry about being tied financially at the hip.

The bottom line is that being almost married or effectively married is not the same thing as being actually married.  You shouldn’t do financial things married people do like buy a home until you are actually married.

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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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