Being single and managing your money is hard enough. Then you throw in a significant other, perhaps one with different financial goals and education, and things can get complicated fast. Both parties in a relationship may know each other extremely well, but have you had the talk? Money can be the sore spot in many relationships, so knowing up front where your significant other stands in regards to money can save you a lot of surprises and possible heartache down the road.

Getting everything out on the table once things start to get serious in a relationship has its foundation in being open and honest in a relationship, and this should not stop when it comes to personal finance. The fact of the matter is that one day your finances will most likely become one, and learning each others’ financial habits sooner than later is wise.

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Perform a Review of Your Finances

The first step in analyzing your finances is to see where all of your money is going. Setting a time to pull out all of your bills, statements, etc allows you to get it all out in the open. Literally laying it all out in front of you and documenting all income and expenses as well as debts is the first step. This is also a good time to organize all of your paperwork and perhaps see what can be consolidated between the two of you.

Determine What Your Joint Goals Are

Before discussing what your joint goals are it is best to write out individually what your personal goals are. Both short and long term goals should be considered in this exercise. After your goals are laid out, perhaps there are a few things that are not necessities that you can also write down.

After you have written out all of your goals and wants, you can look over them with each other. This is the time where you are going to combine goals and assign priorities to them. Discussion can extend around timelines and expectations for when you would like to accomplish everything.

Review New Options for Banking

Having your cash and investments in multiple accounts can lead to much confusion and chaos in your personal finances. After all of your finances are out on the table, is a good time to see what can be consolidated as far as bills, expenses, and accounts. Being in a relationship with someone can have more benefits than just the emotional. Start to brainstorm how you can financially benefit from being together.

Create a Budget for Yourselves

Without a solid budget, none of your financial goals are likely to be met. After brainstorming ways to cut down expenses and work together as a team, you can start to lay out the baseline for your combined budget. Obviously the first step in this is to determine what your combined income is. The next step should be to create realistic goals for what you want to spend in all of your expense categories. Find ways to add to your savings and investment goals. Not only that but you also want to allocate a little fun money that you can use with your significant other in order to have fun together. 

The most important thing to remember is to be honest and open. There is no worse surprise than to find out that your significant other is keeping something from you. Chances are if you are in the position to even consider the smart way to combine your finances, you are smart enough to know that honesty is key.