How Should a Couple Handle Their Finances?

1. What is our budget?

Figuring out your budget is the first step when discussing finances with your partner. Before meeting, you probably had a budget designed solely for you, but your income levels will change now that you are together, so it's important to create a new budget.

I recommend sitting down and looking at your finances over the last month. What bills did you have? How much did you spend on dining out? Write this down. Then write down your combined income for the month. Doing this will give you a clear picture of how much money you have coming in and how much is going out.

From there, you can subtract all of the bills you owe from your income each month and see how much is left over. Decide together where in your budget those extra funds will go. Will you make extra credit card payments? Put more toward a car or a house payment?

Once you have a good grasp of your budget, you can decide exactly what to do with your money.

2. How will we tackle our debt?

Once you have made your budget, it's time to put a plan in place for how much money you can afford to put toward your debt each month. Do both of you have student loans? Just one? How much credit card debt do you both have? While joint debt can be a shared responsibility, if you have individual debts that you had prior to the relationship, those may be yours to tackle.

Organize your debt by including the due date, minimum payment amount and interest rate. When you know how much debt you have, you can decide which method is best to start paying it off. The avalanche method is all about tackling the debt with the highest interest rate first. The snowball method focuses on paying off the credit card with the smallest balance first.

Depending on which type of debt you have, one method may be better than the other. Decide with your partner which method will be best for you.

3. What are our spending habits?

What do you like to spend your money on? Is it different from your partner?

For some couples, interests and priorities for spending are not the same. Take time to sit down together and see what each other’s spending and saving priorities are. You may like to spend extra money going out to eat, while your partner might like to eat at home and save money for going to the movies.

Once you know what the other likes to spend money on, you can start setting aside funds for those things.

4. Are separate bank accounts for us?

For many couples, following the mindset of “what’s mine is yours” may work, but for others, separate may be better. Having your own account can give you a sense of financial independence. You are in charge of how much money goes into the account and what it is spent on.

This could solve a lot of problems. If you earn more money than your partner, you might get frustrated when you see them spend money on things you don’t want. If you earn less, you might get frustrated if your partner micromanages your purchases.

With separate accounts, you won’t feel the need to ask for permission when you purchase something you want.

You and your partner may have different money management styles. You might enjoy using an app to keep track of your budget, while your partner might like to write everything down. Instead of trying to convince the other to follow your style, you can maintain your own account and keep track of it your own way.

At the end of the day, having open and honest money conversations with your partner can save you from a big financial headache later on in the relationship. But the topic can be nuanced, and asking for help is a good first step. A financial adviser can act as a third-party mediator and help you come up with the right plan for you and your partner’s finances.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.