Three Methods for Co-Mingling a Couple's Finances

Some couples co-mingle every bank account, retirement fund and credit card. But that’s not the only way you and your partner can combine household bills.

Merging your finances isn’t an all-or-nothing idea. Couples can choose from many methods. Let’s take a look at some examples.

#1: The Proportional Method

Couple counting money

Couples who use the “proportional method” to co-mingle their finances each chip into the household bills at a rate that’s proportional to their income.

Pros: The main advantage is that neither partner feels the pressure to “keep up with” or “budget down to” the earnings of the other partner. In other words, their income disparity doesn’t cause a lifestyle clash.

The couple also enjoys a “middle-ground” stage of co-mingled finances. They share household bills, but they also keep separate money for themselves as individuals.

Cons: The main disadvantage is that the higher-earning partner might start to feel resentful or might start to feel like they’re being “penalized” for earning more.

#2: The Raw Contribution Method

Couples who use the “raw contribution method” each chip in the same raw number, regardless of how much they make.

Pros:  The higher-earning partner doesn’t feel “penalized” for their success, and the lower-earning partner doesn’t feel “subsidized.

Cons: They need an agreement about what to do if one partner’s income drops to zero (for example, if one partner loses their job). Their relationship could become strained if Kate lives a more glamorous lifestyle than Danny because she has more “fun” money leftover after paying the bills. Some couples also criticize this method as feeling too “roommate-like.”

#3: Complete Co-Mingling

Couples who completely co-mingle their finances combine their bank accounts, carry only joint credit or debit cards, and list each other on their investment funds.

Pros: They unite as a single unit – “we” rather than “you” and “me.” Neither partner keeps “score.” If one person’s income rises or the other person’s income falls, they’ll balance each other out. Record-keeping also becomes easier.

Cons: The higher-earning partner can resent the lower-earning partner for spending his/her earnings, especially if one person tends to be a spender while the other tends to be frugal.

Conclusion

There’s no single best practice for co-mingling a couple’s money. The most important thing is to realize that there are many methods you can use.

You and your partner should weigh the pros and cons of each strategy to decide which method feels best for you.

Once you choose a method, don’t be afraid to tweak it or change it. You and your partner may need to experiment with different strategies before you find the “perfect balance” between your individual money and your couple money.

Article First Seen: The Balance