Let’s face it, having to manage finances is not a walk in the park. It can lead to stress and disagreement even in the best of relationships.
In fact, the 2014 APA Stress in America survey found that almost a third of adults with partners (31 percent) reported that money is a major drawback in their relationship. So whether you’ve got future plans in mind, such as buying your dream house or planning holidays together, combining your savings is a big decision that requires more than an overnight discussion.
While you think through your options of saving as an unwed couple—either opening a joint bank account, keeping one account for your savings fund, or putting your money in the traditional piggy bank—considering the pros and cons of saving together can help you make a smarter decision.
Saving itself is a good practice
It doesn’t just train both of you to be responsible, it also gets you into the habit of saving, which is beneficial in the long run.
“It’s better to save together than not save at all,” says Sunlife financial advisor Roselle Balbin. “If you have savings as a couple, it can also lessen the stress if when you need money for emergency purposes.”
You can have good times together
Hit the beach or climb the mountains together, as long as you have enough cash, the world is your oyster.
Shirim Selidio and Martin Alejan, who have been in a relationship for three years, share that they save money together so they can afford a grand vacation once a year.
“I keep the money. My budgeting is old school. It all started two years ago when I saved the money in a piggy bank, then we decided we’d do it together. We created a plan as to what amount we will put there every month,” says Alejan. So when it’s time to break the piggy bank and go places, the couple would literally spend all their savings in one go.
It allows for equal contribution
Unlike the traditional married couple, where the husband submits most of his salary to his wife, saving together allows both of you to share the expenses, especially once you start living together.
Luigie Sababan, a father of one who has been in a relationship for six years, shares, “For example, you both share the house rental, or monthly allowance for all of your expenditure, for startups, these savings can be helpful.”
It’s a good preparation for your future
If you’re in a committed, long-term relationship, saving help you keep track of your financial progress. And should you decide to take the plunge and get hitched, expenses would be the last thing the two of you would worry about.
“If you’re unmarried, saving money together can help you plan forbuying the basics, particularly a house and a car. If you’re also looking into having kids together, or if you already have one, then you can even use the money to plan for the kid’s education,” says Alejan, who is also a licensed financial advisor.
Lack of Financial Freedom
When saving together, especially with a joint bank account, there’s a tendency for some couples to feel a loss of financial independence.
For instance, if you have a business and you’re not comfortable sharing discussions about money with your partner, then problems may arise. “Looking at it from a businessman perspective, for example, it’s hard kapag may nakikialam na sa money mo, especially kung hindi mo pa asawa,” says Don Soriano, sales coach, financial advisor, and author of the book Break Free, a book about entrepreneurship.
Spending can get out of hand
Don’t get us wrong, there’s nothing really bad about saving, but you might want to evaluate first if your partner is responsible enough to keep your hard-earned money.
“In reality," Balbin explains, "I think there are more pros than cons when couples save money because saving is always a positive thing. However, this positive habit becomes negative if your boyfriend or girlfriend uses your savings for his/her personal gains, especially without your consent.”
Risk or loss of money
While you might be glad to bid your old flame farewell after the split, you don’t want to say goodbye to your money and be left penniless. Managing your finances post-breakup can be a pain in the ass, especially if your partner is uncooperative.
“If the funds are in a joint account, the other party has the right to withdraw the money and close the account freely even without the partner’s permission,” says Balbin. Of course, more so if the savings are kept in a personal bank account or a piggy bank.
Worse, if your partner dies. “If you’re unmarried and you put all your savings in the personal account of your partner, chances are high that the account will be frozen and the people who have rights over the money are the immediate family members, not unless the person has a last will and testament,” Alejan notes.
And while you have freedom to manage your finances, it’s still best to seek an expert’s help if things get out of control.