Congratulations! You've met the man or woman of your dreams and have moved in together or are planning the big move. You're probably in the "ain't love grand" stage, and we'd prefer not to burst your bubble. But how about a dose of realism, especially about money?
When you live with someone, you and your partner must make decisions about pooling money and property, or keeping your money and property separate. Because you live with someone doesn't mean your financial lives must become one.
Don't feel pressured to combine everything just because the couple upstairs has only one bank account. Keeping your property and debts separate means you'll have no financial obligation if your partner lives beyond his or her financial means. Your paycheck cannot be garnished and your property cannot be taken to satisfy your partner's overdue bills.
Of course, don't refuse to pool your money just because you're best buddy and his boyfriend, both hell-bent on independence, maintain all separate accounts. But before you put both names on bank or credit accounts, be sure you really know and trust your partner, and be certain you understand what combining finances means.
Both you and your partner may be fully responsible for all activity that takes place with the account. You each may be 100% liable for bounced checks, overdrafts, charges over the limit and all the rest.
Here are some models for how to share (or not share) your income and property.
Marriage model
All property you acquire is jointly owned, no matter who earns the money to pay for it or who actually acquires it. You put all bank and credit accounts in both names. If you split up, the property acquired during the relationship is divided equally.
Socialist model
You open joint accounts and pay the joint bills out of joint accounts to which you have contributed according to your incomes, such as three-fourths and one-fourth.
Business partnership model
You open joint accounts for limited purposes, such as paying household expenses or saving for a vacation. It helps to have a contract specifying the percentage ownership in all property jointly accumulated.
Splitsies model
You each agree to be responsible for your own support. Like college roommates, you pay separately for food, clothes, entertainment and everything else. You have no joint accounts. This arrangement can be taken to extremes or can be worked out in a fairly easy-going, common sense, "I-paid-for-breakfast, you-pay-for-lunch" way.
Joint Bank Accounts
Joint bank accounts are sensible if you limit their purpose and keep adequate records. That said, many same-sex couples maintain joint bank accounts for years. But still, a joint account is a risk; each person may have the right to spend all the money, unless you require both signatures on checks and withdrawals - and that can be cumbersome.
