A recent episode of Portlandia featured a skit in which a couple decides to take the next big step. Nope, not marriage—combining their financial accounts! The vignette starts off with a hilarious scene in which Carrie Brownstein “proposes” joint finances to a tearfully joyful Fred Armisen. It ends with Fred Armisen revealing that he’s up to his eyeballs in debt and then spending all of Brownstein’s money on a giant hot tub. Oops.
The skit is a tongue-in-cheek reminder that combining your finances with the person you love isn’t always a walk down lover’s lane. And when there’s debt involved, it can be even trickier. However, you can effectively deal with debt as a couple if you’re careful and understand the law. Use these suggestions from DailyFinance:
- Have the talk. It’s not romantic but, before you get serious with finances, you need to lay it all out on the table. Sit down and discuss any debt you’re bringing to the relationship and how you’re managing it. You should also discuss income and any other regular expenses you have to pay.
- Get legal advice. Although you’re not responsible for your partner’s pre-marriage debt, you are responsible for debt you incur if you co-sign a loan with them. In communal property states, you also could be held liable for debt your partner takes on after marriage. Meet with a lawyer or financial advisor so you have a clear idea of who’s responsible for what.
- Maintain separate finances. Don’t combine everything. It’s a good idea to have your own separate financial accounts and then maybe one joint account for shared expenses. Again, it’s not romantic, but you need to protect your money in case the relationship goes south.
These aren’t easy conversations to have. They’re awkward, practical, and decidedly unromantic. But they’re necessary, and you and your partner will be glad you had the discussion. If you don’t, financial problems down the road could cause rifts in your relationship. If you’re honest from the beginning and choose to support one another in your financial challenges and goals, you’ll have a much better chance at a smooth financial life together. (Just don’t go buying any hot tubs without consulting your partner first.)