Do you mate? This is how you know when it’s time to combine your finances

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Money may not be top of mind if you’re in love, but it deserves serious consideration if you want a lasting relationship.

A partnership that pools resources and shares expenses can be a very good thing for a relationship and for each other’s financial well-being. However, different spending and saving habits can also be a continuing source of conflict for couples.

From a household financial management point of view, sharing a joint bank account can make things much easier.

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“Money stresses people out,” said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth in New York. “In general, the fewer moving parts, the better.

“If you pay bills and deposit checks from and to one account, it’s easy to see what’s going in and what’s going out.”

This, in turn, forms a good basis for drawing up a joint budget together and determining financial goals. It also gives both partners a good overview of each other’s consumption and saving patterns, and it can potentially highlight issues that need to be resolved.

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Boneparth suggests that it’s better to find out about a partner’s spending habits, their debt obligations and general financial conditions sooner rather than later.

“Ideally, you want to fill it all out before tying the knot,” he said. “These things can create rifts in relationships.

“It’s about trust and honesty,” Boneparth added. “You have to solve problems, find solutions and support each other in these things.”

What to keep separate and when

A joint bank account is one thing, but future investment assets, sharing rights to real estate and other property is another. While people can and should designate beneficiaries for investment accounts and other assets, pooling assets and accounts with a partner may not always make sense.

Indeed, there can be a wide range of personal, financial and tax reasons why either pooling assets or keeping them separate is the best approach for a couple.

“There’s no one solution that’s right for everyone; it’s a matter of individual preference,” Boneparth said. “There may be good reasons to keep some accounts separate and divide assets and liabilities in different ways.”

The universal solution to many of these problems is simply solid communication.

Douglas Boneparth

president of Bone Fide Wealth

For example, one person may have business interests, property or an inheritance they want to keep separate from a relationship. In some cases, it may be to ensure that one spouse is not exposed to a potential liability that the other partner bears as a business owner or professional. In other cases, it may simply be the personal choice of one or both partners to manage their finances separately.

The context of merging or keeping assets separate is often considered under the guise of a prenuptial agreement before a legal marriage. For example, the parents of one spouse may be concerned about protecting the assets they plan to pass on to their fiance’s child.

This process can of course be a source of friction and pain between a couple, but it is important to address these issues beforehand and resolve any emotional issues.

The only way to ensure that spending, saving, earning and inheriting money does not become an issue of conflict in a relationship is to put everything on the table and discuss it.

“The universal solution to many of these problems is simply solid communication,” said Boneparth, who is married himself. “That’s what makes for a good relationship in general and for a good economic partnership specifically.”

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