For the past several months, you’ve enjoyed a great relationship with a funny, sexy, attractive partner. In fact, you believe you’re in love, and that you’ve truly found “the one.” Sooner or later, the question will come up—are you ready to do it? I’m not referring to sex, moving in together, or marriage, but financial intimacy. When is the right time to combine your finances in a relationship?
“Financial intimacy is the act of two people literally exposing their financial resources to one another in the context of a relationship,” says Zara D. Green, my wife and the co-founder of Grown Zone. “Just as with physical/sexual intimacy, relationship partners should always be mindful of protecting their health and safety, before merging their money. Bonding financially with a love interest before getting a complete understanding of how he or she handles money is a recipe for both emotional and financial disaster.”
You and your partner may already be emotionally and physically intimate, however that does not mean you’re ready for financial intimacy, no matter how strong your feelings are for each other.
Here’s what you need to consider:
How long have you been together?
Have you been in an exclusive, committed, and drama-free relationship with your partner for at least a year? If not, don’t commingle your finances or make joint financial commitments like co-signing on an apartment lease or car loan. “Complicated” and off-and-on “situation-ships” don’t count, no matter how long ago they began.
What do you really know about your love interest’s financial habits?
Don’t go by assumptions or what you are told, but what you can learn by observation. Does your sweetheart abuse credit cards or use them sparingly? Does he or she honor his or her financial commitments, or do they routinely bounce checks? Does he or she contribute to a 401(k) account, or do they count on the lottery to fund their retirement? Once you combine your money, your finances will be affected by your honey’s financial habits and vice versa.
“One of the key questions you want to answer is whether your love interest is a safe financial partner or a potential adult dependent,” Green says. “If the latter, meaning they habitually depend on others to finance their desired lifestyle, engaging in financial intimacy is a bad move.”
If you are not sure (especially after a year or more), or if your partner resists or resents your efforts to learn how they handle money, do not mix your finances.
For a true reality check of how well you know your love interest, check out 6 Things You Should Know Before Opening Your Legs, Checkbook, Heart or Home at GrownZone.com.
Can you talk about money freely?
Until you can have open, safe, and honest discussions about your financial beliefs, philosophies, fears, habits, and goals, it is unsafe for you to be financially intimate. That goes double if you can’t talk about money without one or both of you feeling judged or attacked, or becoming angry or resentful.
Speaking of your financial goals, be honest—are they complimentary or in conflict? Can you travel the world in early retirement while supporting you partner’s efforts to capitalize on a new business? Financial intimacy could place both goals as well as your relationship at risk.
Are you prepared to become financially naked—before committing acts of financial intimacy?
If either or both you are unwilling to reveal your complete financial histories and details of your current financial situations—including credit reports and scores, outstanding loans and debts, credit cards, child support obligations, and bankruptcies—keep your finances separate. Combining your finances without sharing this information is like having unprotected sex without knowing each other’s HIV status.
Are you prepared to create a budget together—and stick to it?
Do not commingle your finances if you can’t agree on a plan for handling shared income and expenses. Operate according to your budget for a trial period of at least six months, before opening joint accounts or otherwise combining your resources.
Think twice before taking on joint financial obligations.
Especially if you’re not married, do not co-sign, open joint accounts, or make shared financial commitments without signing agreements detailing terms of responsibility, contributions, and how fees and payments will be handled.
Better yet, just don’t do it at all. You can share financial resources and a budget, without taking on joint financial obligations before getting married. On the other hand, if you make such commitments and your relationship ends, you’ll both likely regret it. The only thing messier than a nasty divorce is a break-up between two unmarried people that are legally bound by shared financial commitments.
If financial intimacy doesn’t feel good (meaning safe and healthy), don’t do it.
If either you or your partner feels manipulated, coerced, reluctant or anxious about combining your finances for any reason (real or imagined), keep your finances separate.
Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, personal growth/relationships coach, and co-founder of Grown Zone, a relationship education initiative focused on personal growth and healthy decision-making. Follow him on Twitter at @AlfredEdmondJr.