Living together before you get married is pretty common these days; the Centers for Disease Control and Prevention say about 60 percent of couples do it. Many reasons are behind their decision, from a desire to test the relationship to simple convenience.
Whether or not to live with your significant other before your official “I do’s” is a decision only you can make — and there’s no one right or wrong answer that fits for everyone. However, just because you’re living together with the intention of marrying and spending a lifetime together, does that mean you should also merge your finances before you’re married?
Once you’re married, your money and credit can be intertwined, even though you’ll both retain your individual scores. You’ll likely incur debt together, make investments together, and share joint financial accounts. The merger of marriage and money is inevitable once the nuptials take place.
But it is possible—and possibly even beneficial—to keep your finances more separate before you marry, even if you’re cohabiting. There are pros and cons to consider.
On one hand, you might find small steps like opening a joint checking account out of which you both pay household bills to be good practice for working together as a financial team after you’re married. On the other hand, you may find that sharing expenses or debt before marriage can affect your credit score.
Keep in mind, it will be easier to merge things like savings accounts, retirement funds and credit accounts after you’re married because your marriage license affords you certain legal rights that corporations and banks recognize.
Though no one in love ever wants to think it won’t work out, engagements get broken all the time. Going your separate ways may be a bit easier if you don’t have to split your finances.
Before you make any decisions about money, it’s best to engage in an honest discussion with your significant other about financial matters. Remember, if you can’t communicate about money before you’re married, it won’t get any easier just because you’ve both said your vows and signed a piece of paper.