Published in: Banks | Sept. 19, 2019
Are You Rushing These 8 Relationship Money Milestones?
By: Lyle Daly
Completing these money milestones at the right moment could make for a happier relationship.
Every serious relationship has its key milestones where the partnership takes a big step forward. The first “I love you.” Going on a vacation together. Meeting the parents. And, of course, there are the money milestones.
Part of having a healthy relationship is going through these money milestones at the right time. If you rush them, it could add too much pressure and stress to your relationship before you’re ready. But waiting too long could leave you or your partner wondering why things are progressing so slowly.
To get an idea of when healthy couples reach each milestone, The Ascent asked people who are married about the financial timelines of their relationships. Here’s what we found to be the average timeline for eight different common money milestones for couples.
1. Creating a joint budget spreadsheet -- 1 year, 3 months
The first major money milestone for most couples is to put together a joint budget. This is a good way for couples to start seriously planning a life together without the pressure of completely merging their finances yet.
It usually comes after several smaller milestones, including disclosing salaries (nine months on average), debts and monthly expenses (10 months), and bank account balances (11 months). That means making a joint budget isn’t some huge revelation of all this information. It’s simply when you make financial plans as a couple instead of as two individuals.
2. Moving in together -- 1 year, 6 months
The average married couple moved in together at the year-and-a-half mark of their relationship. This is obviously a serious commitment, and successful couples usually make sure they’ve had plenty of time to date and get to know each other before living together.
It may seem like couples would start living together by the time they’ve made a joint budget, but it makes sense that this might take a couple more months. Couples should do the joint budget first so they can plan and determine how much they can afford for a home payment. After that, it still takes time to find a new home and transition from their old lives to their new one.
3. Sharing online banking information -- 1 year, 10 months
Lovebirds usually aren’t too cautious about money with each other. Those in relationships let their partners borrow their credit cards after just two months of dating. However, one area where people wait much longer is sharing their online banking info.
Considering the risks that come with giving another person access to your bank account, it’s wise to wait until you know your partner very well before you take this step.
4. Purchasing a big-ticket item -- 2 years
One benefit of being in a relationship is that you have two salaries instead of one (assuming you’re both working). This makes it easier to afford expensive purchases, because you and your partner can split the cost.
The potential drawback is that if you and your partner ever separate, it can be difficult to decide who keeps the big-ticket items you purchased together. If you both want to hang on to a joint purchase, it adds another complication to the breakup.
5. Establishing an emergency fund -- 2 years, 2 months
It takes the typical couple a little over two years to establish their emergency fund. Hopefully, you’ll both already have your own emergency funds that you can combine so you aren’t starting from scratch.
When you reach this milestone, it’s a good idea to calculate how much you’ll need based on your current living expenses. Even if you both had emergency funds before, don’t assume that the combined amount will be enough. Your expenses as a couple are likely to be very different, so you may need to adjust your emergency fund amount accordingly.
6. Merging finances -- 2 years, 3 months
Perhaps the biggest money milestone for couples is merging finances. After doing this, it will be much more complicated if you ever break up and need to separate your finances again, so this isn’t a decision to take lightly.
Whether or not you should combine finances is a common debate, and there’s no right or wrong answer. However, the data does show that you should take your time here. Satisfied couples waited an average of nine months longer to merge their finances than dissatisfied ones.
7. Planning for retirement -- 2 years, 4 months
Retirement planning is another situation where ideally, you’ve both already been saving on your own. After all, it’s never too early to start putting money away in a retirement account.
This is also another area where being in a relationship and having two incomes can help quite a bit. When you and your partner combine forces financially, your nest egg can grow much faster.
8. Starting a college fund for your children -- 2 years, 6 months
Considering couples typically wait at least a couple years to have children, the last money milestone is starting a college fund. This is one of the best ways to help your children succeed in life, because they’ll have the opportunity to pursue higher education without going far into debt.
Like retirement, the earlier you get started on this, the more you can save. You and your partner will just need to decide which type of college fund you want for your children.
Reaching your relationship’s money milestones
Now that you know when average couple reaches each money milestone, you can compare that with the progress of your own relationship.
Of course, just because you’ve reached a milestone earlier or later, it doesn’t mean that you’ve done something wrong. But if you feel like rushing or delaying certain milestones has had a negative impact on your relationship, then it may be worth considering a different approach in the future.
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