Valentine’s Day is a time when many couples take their relationship to the next level. For some, that means giving that special someone a key to your apartment. For others, it means sharing finances by creating a joint bank account.
Whether you’re in a new relationship or newly married, you might want to think twice about combining love and money. Among spouses and partners, 31% reported money as a major source of conflict or tension in their relationship, according to the American Psychological Association’s 2015 Stress in America survey.
Before combining your finances, take this banking compatibility quiz. Add up your point totals and scroll to the bottom of the quiz to find out if your financial relationship is right on the money.
You won’t agree on every aspect as you go through your financial lives, but keeping the lines of communication open when it comes to issues of spending and saving will give you a better chance of succeeding in a long-term relationship.
Difficult times lie ahead if you can’t openly and honestly discuss finances. If you share a joint account, you owe it to each other to talk about financial priorities and spending habits. Think about signing up for a couples’ financial planning class to avoid miscommunication.
“As trust builds, money can become a safe topic to discuss, and the talks will get easier and more natural,” says Dr. Kurt Smith, a marriage therapist and financial counselor. “The money talk should be a regular thing, such as monthly or when bills are paid.”
As joint owners, you will both be legally and financially responsible for money in the account, so prior events like bankruptcies or a poor credit history could cause a strain. Having a clean financial history is one less thing to worry about as you learn how to manage money together.
You can overcome financial mistakes from the past, but they can also haunt your banking relationship if not addressed. If either partner has outstanding debts, the joint account can be drained by creditors. That’s why financial advisor Sabrina Lowell suggests each partner have access to the other’s credit report so there are no financial secrets. In general, the key is to make sure there are no surprises. “Conflict arises when there’s a discrepancy between expectations and reality,” she says.
If you both like in-person banking or the latest technology, it’s a win-win — handling your account in the same way reduces the odds of misunderstandings. Same goes for partners who both are diligent about balancing the checkbook or reviewing transactions regularly to ensure there are no mistakes or surprises.
When one partner is old-school and the other is tech-savvy, you risk going over budget or overdrawing the account. It’s an overdraft waiting to happen if one partner writes checks and the other isn’t used to balancing a checkbook, or if one partner always checks the balance before making withdrawals and the other never looks at the balance before withdrawing.
This doesn’t have to be a deal breaker, though. Look for a bank that offers both a great app and branch experience so you meet the needs of each partner.
Rules establish boundaries and respect. You need a spending limit so that one partner isn’t unpleasantly surprised by a large purchase. While you’re at it, decide on a minimum account balance that you’re both comfortable keeping. Rules make it possible to meet both partners’ financial goals. These will come in handy when you’re saving for a house, a honeymoon, a family or dream vacation.
Any time two people are sharing their finances, compromise and communication are key. A reluctance to set ground rules increases the chances you will cross your signals. One of you might end up spending money on entertainment that the other thought was for long-term savings. Those kinds of mix-ups could lead to frayed relations.
It’s fine to keep an individual account for personal spending as well as a joint account for combined or household expenses. The key is that you are both on the same page to avoid misunderstandings or hurt feelings.
If one partner wants an individual account but the other thinks all finances should be combined, that’s a sign there’s a fundamental disagreement. It’s important to be clear about the expectations for the account.
If you both believe in saving for emergencies, an unexpected expense might not result in an argument. When your car breaks down but there’s an emergency fund to take care of the costs, a safety net lessens the stress.
Old habits are hard to break when a partner hasn’t prioritized saving. Set some boundaries and decide how much you value saving for emergencies, experiences like vacations and big-ticket items.
0-2 points: It’s not time to share a bank account just yet. You can still share pizza and warm hugs while you keep working on the financial part.
3-4 points: You’re somewhat compatible, but you have some things to work out. Decide on ground rules and stick to them if you open a joint account.
5-6 points: Your financial future together looks bright! If you open that account, make sure you keep the lines of communication open and continue to talk about your financial priorities.