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You're listening to Life Kit.
From NPR.
Hey there, Andy Tegel here in For Maryl, Sigerah.
Love and money don't mix.
It's a common sentiment.
In the dating phase, it might feel tacky to ask someone about their financial situation.
When you're in a relationship, money matters might feel taboo.
A subject to be tiptoed around.
Not an us thing.
So this idea that money is somehow unsexy or not intimate, I actually think it's kind
of the opposite when we're talking about money, we're deepening our connection, we're
deepening our intimacy because we're talking about really vulnerable things and we're
also dreaming ahead together and creating a plan.
So that's also really sexy and important.
That's Lindsay Bryan Potvin.
I'm a financial therapist and founder of the Financial Wellness Business Mind Money Balance.
Lindsay says, ignoring money talk when you're coupled up just isn't an option.
We cannot go through a day for most of us where we are not somehow interacting with money.
We're spending it, we're earning it, we're loaning it, we're lending it, we're losing
it.
And when it comes to our relationships, that will almost always be incorporated into our
relationships.
Who is paying for dinner?
Who is paying for the bills?
Are you going to take that promotion?
What does it mean if you decide to not finish out your role and not get public student loan
forgiveness?
There are big questions that have consequences for our relationship and rather than avoiding
them.
It's much better just to face them head on and to be really kind and compassionate and
clear with your partner.
So in this episode of Life Kit, let's talk about relationships and money.
Specifically, what it means to merge your money.
We'll discuss the merits of joint accounts versus keeping things separate, as well as
the yours, mine and ours approach.
We'll touch on debt, credit cards, and the hidden joy of having different financial
personalities under one roof.
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When should you start having a conversation about merging money?
I'm guessing that you don't want to talk about debt-to-income ratio on a first date,
but hopefully you're not saving these conversations until you're married, either.
Yeah, for sure.
I think there's a couple of things.
One is just talking about money in generally and what your thoughts and feelings and behaviors
and values are around money.
The other one is what you're talking about, which is when should we discuss whether or
not we want to merge finances?
Both of those conversations are important, but the first one, just a baseline, what's
your money story should happen much earlier on in a relationship where as though should
we or should we not merge our finances is a different conversation for further down
the road.
Ideally, before you have had some of those relationship changing events, such as are
we going to move in together, are we going to purchase a car together?
Are we going to think about adding the other person as an authorized user?
Anytime we're doing any of those big money milestone moves with a partner, we want to have
that conversation before it happens.
My next question for Eulinsie is, is there an exact right way to go about merging your
money?
I ask you this question in that way because there's some recent research that I've come
upon on this topic and I want to throw a few of those findings your way.
I'm really curious how you feel about this because I find it so interesting.
One large scale study out of the UK followed 7,000 people and it found that couples who put
all their money into joint bank accounts tend to be happier and stay together longer than
those who keep some or all of their money separate.
Similarly, there's a 2023 study out of Indiana University which found a causal relationship.
That married couples who have joint bank accounts not only have better relationships, but
they fight less over money and feel better about how household finances are handled.
To me, that's a pretty convincing argument.
That paints a pretty happy picture.
Does this mean we should all go sign up for joint accounts and pour all our dollars into
the same pot?
As a therapist, I have to say, it depends.
Generally speaking, my favorite way for couples to merge finances is that there's mine in hours
or a joint account only.
My hypothesis about why those outcomes are the way they are with couples is that one
of the biggest issues when I see couples arguing about money is all of the little financial
secrets that can happen when we have completely separate accounts.
We can have somebody who is racking up a ton of credit card debt or who is taking out personal
loans or who maybe has a really not great credit score and isn't working on improving it.
And rather than their partner being in on it from the beginning, they find out about it
three years, five years, twenty years later.
And it becomes a much bigger issue than it would have been if you had, say, senior partner
Missacredit Card Bill, the very first time it happened rather than decades later.
It decreases the likelihood of financial infidelity either happening or being as big of a deal
as it is.
When we are talking about people who have had a divorce or separation before, I do think
it's actually important to keep separate bank accounts or only do a there's mind and
hours for financial protection.
Another reason you might want to do a there's mind and hours or a fully separate bank account.
If you've come from a family where you've experienced financial abuse or you've watched
your parents experience financial or abuse or you have seen somebody steal somebody else's
credit or identity and you might have very strong feelings such as a trauma response to
having to share your money with other people.
And that makes sense to me to keep your finances separate, but otherwise I'm pro joint accounts
or I'm pro a there's mind and hours account.
Okay.
So a lot of good stuff in there.
What I'm hearing is you should practice financial transparency.
Does that sound about right?
Is that sound fair?
It does and then this is where the asterisk comes into play because a lot of people might
also be screaming at their radios right now saying, well, that's not fair.
I'm an adult and I want my own autonomy and I have a right to privacy, which is why
I say there's mind and hours can work really, really well where the bulk of your money
is shared.
So you're making sure that your bills are paid on time.
Your rent is paid on time.
You're saving toward future goals together, but you each have a little bit of money that
you can spend how you want without having to text your partner and say, you know, hey,
can I buy you new pair of shoes or can I buy some skittles when I go put gas in the tank?
Like none of us want to feel like we are under the control of our partner.
So having some financial autonomy is really important.
And for some couples having a fully joined account feels great because they are able to
spend and save and talk about it very openly for other couples having that joint account
only feels like they are losing out on that autonomy or on that independence.
And so having a theirs mind and hours account helps to scratch that edge.
So take away one.
No matter which option you choose, full join accounts, separate pots or yours mind and
hours, it's important to practice financial transparency with your partner.
That doesn't have to equate to a lack of independence or autonomy.
It just means making sure you're both getting the full picture of your financial lives.
That means going deep on those money stories.
If you are going to completely share your finances with your partner, you need to have conversations
that are transparent, buff or hand.
And this means not just what's your credit score, how much debt do you have, how much do
you earn, but also what were you taught about money?
How does the way that you grow up, shape what you think and feel about money?
What do you believe you're allowed to spend money on?
What's your relationship with debt?
What are you proud of that you do financially?
What are things that you wish you were a little better at financially and how can I help support
you?
I want to do financially in the next one year or five years, 10 years.
So really getting a sense of what matters to them and what's important to them.
And you also disloyalizing that as well so that as you're going into merging your finances,
you have a really clear understanding of your partner's relationship with money and that
you can also get that they understand you too.
So first kind of talking about all the emotional stuff.
And then when it comes to the merging of it, I like to think about all of these financial
action steps and outcomes really as experiments.
Take away two.
If you're sharing the same pot, make a flexible financial game plan.
So who's going to pay what bill?
How much feels fair for each of us to contribute to household expenses?
At what dollar amount do we need to send a check in text before spending?
No, it's okay to change your mind.
So maybe we experiment for three months with having all of our money together and seeing
what it feels like to say have all of our bills on auto pay.
If that feels really stressful for one of us, then we have to sit down and decide, okay,
does one of us take over bill pay or is there something else that we can do to make this
feel a little bit less stressful?
But giving yourself an opportunity to make sure that you're on the same page emotionally
and financially and remembering that none of this is set in stone, you're figuring out
how to merge your finances and do your money with somebody else, which is already a challenging
skill for an independent adult, but it's really challenging when you're bringing somebody
else in and it's totally fine and normal to have growing pains along the way.
Take away three.
Have backup plans.
Especially if you keep your finances separate, it's important to practice consistent communication
about individual contributions and to know how to access any funds you might need for shared
expenses.
I know this sounds really icky, but if somebody were to be sick and not be able to work or
God forbid, pass away early, how does the other person have access to their partners, checking
account and bank accounts that those bills can continue to be paid?
If right now you're earning almost identical money, what happens if the other person starts
getting a job where they're earning double or triple what the other person is earning or
what if somebody has to take a step back from the workforce?
Eviclarate, these are conversations that you have to have if you have a joint checking
account anyway, but they become even more important when you have your finances separate because
there's more logistics that have to go into play to make sure that everything is covered
that needs to be covered.
Lindsey, what does a middle ground look like?
Is there such a thing as splitting everything 50-50 for example?
What is going to look in practice?
Yeah, this idea of splitting everything 50-50 makes sense in theory, but the reality is
that we just don't live in a theoretical world.
Most of us are not earning the exact same dollar amount nor do we have the exact same
lived experiences, privileges or oppressions as our partner.
If you're earning the exact same amount, then going 50-50 might feel really good, but
it doesn't take into account, maybe you earn the exact same amount, but one partner has
$150,000 of student loans and one has $10,000 of student loans.
Even if you're earning the same amount, what doesn't necessarily mean that your financial
background is equal, so keeping that in consideration can be really important.
I really think about it as for lack of a better metaphor, like a big old soup, everything
goes into the pot and it all blends up together and it's really hard to know who gave what,
but you know that when you're in a partnership for the long term, there will be times where
one person is earning more than the other.
There will be times when one person is taking on more of the emotional labor or more of the
household tasks, and as long as you have open and honest communication about what your
roles are, knowing that they'll change over time, then that's great.
Lindsay, could that yours, mine, and ours approach be a good solution for those who aim
to do 50-50, but still might need some wiggle room?
Yeah, yours, mine, and ours is a little bit of the best of both worlds approach, where
the hours pot of money is where all of the shared bills and shared goals go.
So all of your bills would be paid from that account, all of your shared goals would be
in that savings account as well.
And then the yours and mine would be the money that each of us gets to have for our own
psychological and emotional benefit quite frankly.
This can be particularly helpful if somebody has come from a background where they've witnessed
maybe unhealthy financial dynamics, and they want to know that they have a little pot of
money in the event that something would bad, that they can go to, that can provide some
of that psychological safety.
It can also provide each person with a bit of autonomy to say, I'm going to spend the
money that's in my account the way that I want to spend it, or I'm going to save it up
forever and ever, and you can't tell me otherwise.
So it gives each person a little bit more autonomy and security if they struggle with the fully
merged bank account.
So take away for, understand that 5050 doesn't really exist.
Instead, define what fairness means in your relationship and aim for that.
That might look like some version of yours mine in hours.
And if it's not working, it's always okay to go back to the drawing board.
I think you can reconsider a new system at any time when it starts to feel a little bit
sticky or tedious or like it's no longer working.
I think there are often something milestone times where it's important to have that conversation
to make a decision around whether or not you should change how you are doing your finances.
For example, getting married, moving in together, having a child, a child leaving the house,
a person losing a job or getting a new job, any of those big life milestones, that's
a good time to revisit the conversation about money management and whether or not it's
still working.
And then of course, as I mentioned, anytime you're starting to feel a little bit icky about
it or it's starting to feel unfair or you're feeling that resentment bubble up, that's
a great cue to have a conversation with your partner about it.
Let's talk about financial personalities.
Everyone has their own.
And often, you've seen that meme, I'm sure online that like everyone, there's always a
spender and a saver and they marry each other every time.
I'm a spender.
My husband is a saver.
It is not always fun.
Can we talk a little bit about what to do when they're a different financial philosophies
in a household?
Yeah, you're not wrong and actually there's a new book out by Rick Scott called Tightwads
and Spendcrifs that actually talks about this phenomenon.
And his theory that he has kind of found in working or rather in doing research with
couples who identify as spenders or savers, is that they do often end up marrying the opposite.
The way that he kind of frames it is that we might be a little self-critical of our spending
self or of our saver self, so we look for somebody who has the opposite types of qualities
from us to kind of help provide that balance.
And I think balance is the key when we are thinking about couples and money.
What I mean by that is that we don't want the spender to override the saver and say,
oh my gosh, don't worry about it.
You know, life's so short, you only live once.
Let's just like spend it all because that isn't exactly the best philosophy for moving
through life though, it might be very fun.
It might also be very stressful.
And alternatively, we don't want to be saving all of our money to the point where we are
not using it to enjoy the things that can bring us joy and contentment and connection
and adventure because we're so fearful of spending our money.
So actually, I think it can be really beautiful when we have a spender and a saver together
to create that balance and find what feels really good and enjoyable for each person.
So you have somebody kind of focusing on the now and somebody kind of focusing on the
later and each person can kind of bring that balance into the overall relationship.
Let's talk a little bit more about big life transitions.
I think, you know, often the first time couples really get into weeds about how to handle
finances together in a real ways.
You know, when they take that big, that first big international trip or they move in together
that first pet buying that first couch, any advice on how to handle those big spends,
smartly, fairly how to have those conversations.
Yeah.
So, you know, I think that's really what is right is what is right for you and what is
right for your partner.
As I've said before, I think having the conversation beforehand is the best, best, best option.
But if it is too late and you are already, you know, in Thailand and backpacking around
or staying in nice hotels and you're bringing up the conversation, better late than never.
And even though we can't rewind the hands of time and change how things what, we can use
our experiences to shape our future experiences to better align with what feels best in our
nervous systems.
And what I mean by that is if you thought that being spontaneous and putting everything
on a credit card would feel really good and maybe it did in the moment, but coming home
to a big credit card bill, all of a sudden felt very dysregulating and very anxiety-provoking,
the new and your partner might sit down and say, look, the idea of being spontaneous sounds
really great and not having saved up beforehand actually means that I feel like I have a financial
hangover after we went to Thailand.
What can we do next time?
So it feels like we can be spontaneous, but we aren't paying the financial price when
we get back.
And then you and your partner can come up with a plan that feels good.
Maybe you sign up for flight alerts.
So if you have a destination in mind and there is a flight sale, you can bounce on that
sale right away.
Maybe it is putting a little bit of money every single month from checking into savings.
You know, maybe it's getting creative and signing up for a house swap website to decrease
the cost of that particular purchase, but with your partner figuring out what feels
best for us so that we can spend an alignment with our values and not feel guilty about it
once we have made that big purchase.
Oh, financial hangover.
That is such a good term.
Planning a first birthday party right now and I feel that so strongly.
Oh, yes.
And on that note, let's talk about handling debt.
Specifically, I'm thinking about past debt.
I'm thinking about bringing debt into a relationship, say student loan debt or outstanding medical
debt, very thorny, tricky issues.
How should people think about that?
How should we talk about it with our customers, our partners?
We have a problem in our country by talking about debt as a moral issue and specifically
as a moral feeling.
We tend to have this thought or philosophy that if a person has debt, then they are irresponsible,
they are bad, they are immature.
They are a fill in the blank.
And while there may have been instances in which a person had more debt than they anticipated,
I also think it's really important not to let the person off the hook, but to also acknowledge
that there are so many systems in place that make it really easy to rack up debt and also
really hard to get out of it.
So when it comes to debt and starting off a partnership, I think being incredibly transparent
about what your current relationship with debt is and what you want your future relationship
with debt to be like.
And if people are thinking like, I don't want a future relationship with debt, Lindsay,
what are you talking about?
I think it's really important to rethink that because it is just simply not true that
most of us will go through life without needing debt, whether it is student loans, a mortgage,
an auto loan.
There are so many different times where we will need to borrow money in order to make ends
meet and not making judgment of it or making it mean something bad about us.
So first, acknowledge what debt you have and just share what your plan is to pay off
that debt and how important paying that debt off is.
Oftentimes when we are getting ready to merge finances, there might be some anxiety over
the merging of finances because we don't want to take on our partners debt or we're fearful
that even though they've paid off debt in the past, they might get back into those behaviors,
those spendy behaviors once we merge bank accounts.
So having those conversations up front is really important.
Where might it make sense to take on somebody's debt?
Where might it be advantageous for a couple to do that?
So where it might be advantageous to take on somebody else's debt is if you are in a position
where maybe you are a very high earner or you have a really good credit score, it might
even make sense for you to help out with that person's debt to help raise their credit
score over time.
To be clear, this doesn't mean I could say, okay, Andy, I'm taking on all your debt.
It's now waived and now your credit score has gone up 100 points.
That's not the way that it works.
I'm more thinking of if you're getting ready to purchase a house and you're getting
ready to purchase that house together, if you're both applying for a mortgage and one
person has a low credit score and a lot of debt, you're going to have a harder time
getting a good interest rate and qualifying for something that might be advantageous in
the long run.
So if you have somebody who has maybe some consumer debt that would be easy for you to pay
off, you might make a decision to pay that off and have your partner's credit score come
up over the next six months or 12 months for the greater good of the partnership being able
to purchase a house.
Now on the back end, you can make a decision about maybe your partner quote unquote pays
you back or maybe they put a little bit more down for the down payment than you.
There's so many different ways to kind of think about it.
But if you're thinking about making a big purchase, being really cognizant of how much
debt your partner carries is going to be an important thing to do.
Take away five.
Get real about your debts.
This goes back to being transparent.
Are you sensing a theme?
Put all the debts on the table and figure out a plan.
And that includes credit cards.
I think having a plan about what is your relationship with credit cards going to be what
is the plan for paying them off? How many cards do we want is an incredibly important
conversation to have right away?
I'm a fan of having a shared household credit card where all of your household expenses
may go on it and then paying that off in full at the end of the month, such as putting
your cell phone on it, your gas on it, your groceries on it, and then having all of those
things paid off in full.
Notice that I say paid off in full and not making them an unpayment.
And the reason for that is that at the time of this recording, interest rates are incredibly
high and it makes it really challenging to get out of that credit card debt if you are
only making the minimum payment on that.
So having that conversation at the beginning is incredibly important and also thinking
about how much of a role do we want credit cards to play in having the type of lifestyle
that we want to have?
Lizzie, sharing your financial life with someone can be hard but also really rewarding, right?
Can you talk to us about some of the good that can come from merging your money?
Oh my gosh.
So as I mentioned at the beginning, merging our money and specifically talking about what
that means can really deepen our relationships with our partner.
It is a great way to demonstrate what it's like to be vulnerable and to also have compassion
to ask your partner to hold space for you and to be the person holding space.
It is not just about all of these different excels, sells and dollars in and dollars
out.
It's really about saying to your partner, hey, I'm in this with you.
I want to be with you.
I want to make this work and I trust that we can overcome the little bumps in the road
that are bound to happen financially speaking.
And also the great outcomes of having merged finances and talking to your partner about
money are getting to enjoy the money in the way that feels really good for you.
Whether that is looking at a lot more money in your savings account or whether that is
saving up money every single year so you can take a couple's trip, whatever it is for
you knowing that you're doing what's best for you in your life and it is supported by
the way in which you are managing your money so you can achieve those goals.
Okay, team, let's recap.
Take away one.
Practice financial transparency.
That means regardless if you have fully joined accounts or keeping your money separate
or fall somewhere in between, you both understand the full picture of each other's finances
and practice honest and open communication about your shared financial life.
Take away two.
Create a flexible household financial plan.
So who's in charge of rent, who takes utilities, what about groceries?
How much can we put on auto pay?
And don't be scared to experiment with your approach.
You can always change your mind.
Take away three.
Have a backup plan.
Especially if you keep your finances separate, it's important to practice consistent communication
about individual contributions and to make sure you know how to access any outside funds
you might need for shared expenses.
Take away four.
Stop chasing the mythical 50-50.
Instead define what fairness means in your relationship and aim for that.
Lindsay's a fan of setting up some version of yours, mine, and ours.
And take away five.
Get real about your debts.
It's a fact of life for a lot of people.
So put them all out on the table and figure out a plan together.
And don't forget to factor credit cards into that picture.
For more life kit, check out our other episodes.
We have one on credit card points and another on dividing up household labor fairly.
You can find those at nperidotorg-slash-lifekit.
And if you love life kit and want more, subscribe to our newsletter at nperidotorg-slash-lifekit-newsletter.
Also, we'd love to hear from you.
If you have episode ideas or feedback you want to share, email us.
At lifekit-npr.org.
This episode of Life Kit was produced by Claire Marish Neider.
Mary L. Sigerra is our host.
Our visuals editor is Beck Harlan.
Our digital editor is Malik Kukareeb.
Megan Kane is a supervising editor.
And Beth Donovan is the executive producer.
Our production team also includes Margaret Sereno and Sylvie Douglas.
Engineering support comes from James Willits.
I'm Andy Tagle.
Thanks for listening.
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