A guide to combining finances for couples and newlyweds

What it means to combine finances

Even if you have a strong relationship, there are some important details to consider before joining finances. Money Smart's guide to relationships and money, opens in new window makes some key points:

• If your partner defaults on a joint loan, you may have to pay for the whole amount – even after your relationship ends.
• If a utility bill is solely in your name, it’s your responsibility to pay it.
• You need to think realistically before becoming a guarantor on your partner’s loan. If they can’t repay it, you may have to.
• You’re liable for any papers that you sign, so make sure you read through everything before you move forward.

Different types of shared finances

A shared bank account is a big step in your relationship, so it’s important to discuss what type of account will suit you best and seek financial advice if need be.

After you’ve spoken with your partner and decided if you’d like to combine some or all of your finances, you then need to work out which accounts you want to share.

Savings and transaction accounts

You might decide that you want an everyday account to help budget and manage your funds. Or, you might want a savings account or term deposit to earn interest to help you get to a savings goal.

Credit cards

You might also consider sharing a credit card.  Before you rush into this, know that you’ll be sharing a line of credit with someone, so  think about what you’ll use it for and ensure you and your partner are in agreeance.

Learn more about adding an additional cardholder to your credit card account.

Home Loans

Thinking about buying a property with someone? Learn about the different types of home loans available.

Managing shared debts

Sharing finances often means making joint decisions about managing your debts. It also means having honest discussions about current loans, as well as your spending and saving habits – good and bad.

If you have assets and investments you want to protect, it may be worth entering a binding financial agreement (BFA), also known as a prenup. Consider getting independent financial advice about what may work best for you. 

What to do after merging accounts

If you decide to close your individual bank accounts, get in touch with all the companies you have automatic debits or deposits with and give yourself enough time to move these over to your new joint account.

You might also want to consider combining your health insurance. As always, it’s a good idea to seek independent financial advice before making these decisions.

Joint finance moments

Whichever way you decide to share finances with your partner, whether you’ve been a couple for more than a decade or you’re newlyweds starting to figure things out, there are many different moments during life when you’ll need to talk to your partner about money.

A wedding budget that works for you

For many couples in Australia, getting married is one of the most exciting events in their lives. But as every celebration is different, your best approach is to think realistically.

This starts with setting a budget that’s built around you both.. It helps if you and your partner can agree about how much you want to spend – this will hopefully reduce any potential conflict and make sure that you both understand and agree about how other financial goals may be impacted by the cost of a wedding.

From the engagement ring to the reception, the costs of a wedding can stack up. But there are many ways to boost your funds too, such as financial contributions from parents and gift donations from friends.

To get a more detailed overview, it’s worth reading our article on budgeting for weddings. After considering everything, you might find that a personal loan for your wedding can help you check off your wedding planning list and achieve your dream day.

Buying, renting and merging your homes

When it comes to buying a home, a big consideration will be investing in a mortgage. How much you contribute to this will often depend on how much you’re earning and the savings you already have

During the process, you might find it’s something you’re better off doing separately, or that renting is the better option until your finances are in better shape.

If you’re already a homeowner, you might consider renovations as a way of starting your life together. With the right budget in place – or a personal loan to help you out – it could be more cost-effective than buying a new home.

Having kids together

According to recent estimates, opens in new window, the minimum cost of raising a child in Australia starts from $140 a week.  However, it’s also been estimated that the average, middle-class Australian family will spend more than $406,000 on each child, from birth through to finishing school.

It’s clear that having kids is a major financial consideration. From pre-natal costs and navigating parental leave, to upsizing your house and paying for childcare – there’s a lot to consider.