Holding on to What's Yours

Q: I'm 25 years old and have been dating my college sweetheart for almost seven years. We've been living together and splitting all our expenses—we each have our own car, loans, and savings and checking accounts. Our arrangement has worked well so far, but our friends think it's ridiculous that we don't pool our resources. My mother stayed at home for most of her life and never had any money; I'm terrified of losing my career and financial independence the way she did. I love this man and want to share my future with him, but not necessarily a checking account. Does this mean I'm not marriage material?

A: As far as finances go, you're perfect marriage material. You love this guy, yet you're smart enough to hold on to your identity. The only problem is that you're taking an extreme approach by keeping everything separate. The solution is to merge some of your money. Here's the strategy: Both of you are to keep separate checking accounts and open a joint account from which you'll pay all shared expenses. This joint fund will be a testing ground to see how you commingle your finances.

The division of your cost of living should be based on your incomes. To determine how much you should be paying, add up your combined take-home earnings, then figure out what percentage each of you brings in. Let's say your take-home pay is $3,500 and your boyfriend's is $2,800, giving you a total monthly household income of $6,300. Your income is 55 percent of that sum and his is 45 percent. So if your mutual expenses are $3,000 a month, you pay $1,650 and he pays $1,350.

Next up is an emergency savings account. Again, I want you to have both a joint and a separate one. The former ensures that you're protected as a couple; the latter is where you find the certainty that you'll never be dependent on somebody else. Your personal reserve should equal three months of your living expenses, while the joint account should cover six to eight months. I recommend a hefty joint fund so that if one of you were to lose your job or become ill, you would have enough to get by for a while. At the same time, if the relationship doesn't work out, you will have your own nest egg to fall back on.