Should Married Couples Combine Finances? Here Are 3 Options to Consider
Updated: Jul 27, 2022
You’re married! Hitched! How exciting. Now what?
Will the two of you save up to buy a home?
Plan for a baby?
Take a special vacation?
All of these have something in common: they cost money! So, it’s important now that you’re legally wed to be on the same page when it comes to your finances.
The Money Conversation
If this is the first time you’re thinking about your money as a couple, you may have a lot to consider. It can feel overwhelming with all the changes that marriage brings, but a good thing to remember is to take a deep breath and make one decision at a time.
Financial conversations take patience and honesty, and as a couple, you’ll both benefit by having this discussion early on. If you’ve already discussed money matters, now it's just a decision of whether or not you should combine your finances as a married couple.
Talking about finances can be uncomfortable for many people. For this reason, it’s important to plan a specific time to discuss your finances together. You’ll want to approach the conversation with an understanding that you may have different views on finances. How you were raised and handled your money prior to marriage may be different from what you’ll choose to do as a married couple.
You need a judgment-free, low-stress zone to have a productive and fruitful conversation. Now that you’re married, you will be making decisions every day that will affect each other—and money is no exception.
Should All Married Couples Combine Finances?
Among the many decisions you’ll make together is deciding how you’re going to manage your financial accounts. You may choose to open a joint account that offers complete financial transparency between the two of you or maybe you decide that, for whatever reason, fully combining finances isn’t the right decision for your marriage, so you choose to keep your income separate. For example, some couples in which both spouses earn higher incomes prefer to keep accounts separate. In this case, deciding whether you’ll pay your bills jointly or separately is another area that requires discussion.
If a 100% approach to either individual or joint finances doesn't suit you, a hybrid option might be what you need. You may choose to combine some of your finances, but you both maintain freedom and flexibility with the income you earn separately.
Whatever you choose to do, there is no right or wrong. Your decision may be as individual as who you are as a couple. And it’s not written in stone! You may choose to keep separate accounts now, and in the future combine into a joint account. Every couple is different and you know each other best. Keep your communication open and honest and you’ll find the right balance for the two of you.
3 Ways to Manage Finances as a Newly Married Couple
Put simply, there are three options for your finances after marriage:
Combine all your finances into a joint account and share income and expenses
Keep your finances totally separate and continue your financial journeys similarly to how you lived before marriage
Create a hybrid of the two and keep a joint account for shared expenses and separate accounts for individual spending
The major benefit of combining your finances is it creates transparency in the relationship. A joint account allows both you and your partner to know how much money is coming in and where your money is going. It can streamline your finances because you don’t have to worry about separate accounts you both hold and how they play into your financial plan.
The disadvantage of combining finances is that you may feel uncomfortable sharing your spending habits with your spouse. Your financial habits or philosophies might differ and it may be better for your marriage that you remain financially independent.
So if you’ve been living a single life for a while and don’t want to have to explain every one of your purchases, that’s okay! There are plenty of other options.
For a multitude of reasons, you may choose to keep your finances completely separate. This option may appeal to couples who are entering their second marriage or earn higher incomes. It might also be a good option if one of you has a high amount of debt and you’re choosing to keep one income dedicated to paying off that debt.
There still needs to be open communication about your finances, but it may not be necessary to share line-item lists of transactions. You may choose to split shared expenses either down the middle or based on a percentage of each income. Either way, create a written plan for your financial goals and priorities so you both know what your financial responsibilities are.
If completely combining finances is too overwhelming, but keeping separate accounts makes it too complicated, there is certainly a middle ground!
A hybrid option might appeal to you. Maybe you’ll want to open a joint checking account for expenses that you share. For example, you might use a shared account to pay for expenses such as your mortgage or rent, utilities, groceries, child expenses, or a vacation. You can then have separate accounts for personal spending like beauty expenses, hobbies, or clothing allowances.
Giving one another a “spending allowance account” may create less friction when there are purchases that only affect one person. You'll likely still want to create rules against going into debt or set a spending threshold; these should be developed through calm discussion and clear financial goals.
How to Combine Finances After Marriage
Now that you have a general idea of the three options for finances after you get married, how do you go about getting it all done? While it can feel overwhelming at first, you can tackle this! You’ve got a rock-solid relationship and talking about money will only serve to strengthen your foundation.
Create a Budget as a Couple
First, start by writing out a line item list of all your necessary expenses including rent or mortgage, utilities, groceries, and other necessities. Next, list any debt you may have such as car payments, student loans, or credit cards. Then add your miscellaneous but regular expenses such as haircuts, subscriptions, dining out, and fun money.
Once you’ve itemized your shared and individual expenses, you can determine a budget based on your combined (or separate!) income. And remember that budgets are flexible. They don’t have to be a rigid set of rules that will never change. A budget is dynamic and changes with the needs of your relationship and lifestyle.
Whether you’ve been with your partner for a few months or many years, I’m sure you know that you each have your own strengths. One of you may be an incredible cook and the other an excellent housekeeper. The same holds true when it comes to finances.
Many couples have a “spender” and a “saver”. Whichever you are, it’s important to know who is who so that you can appropriately execute your financial plan.
You need to ensure that at least one of you is checking your accounts and inputting the information into your budget. Likewise, someone needs to be in charge of paying the bills. The last thing you want is to think the other person is paying the bills and then you both end up with late payment penalties.
You may also want to set a spending number that needs to be discussed before purchase. For example, some couples have a rule that any item over $100 needs to be discussed before either one buys.
These rules will likely fluctuate and change over time, and that’s okay! Your financial goals and habits can and should grow and mature over time.
Make Combining Finances a Breeze With Financial Coaching for Couples
There are many options when it comes to combining finances as a new couple—or choosing to keep them separate! What is most important is to be on the same page. If one of you is at all uncomfortable with the current situation, speak up! Open communication is key to a healthy marriage and only the two of you know what works best for your marriage.
At Wealthly, I love helping couples figure out the best money strategies that work for them. So if you and your honey are in need of some financial coaching, email me at email@example.com or click here to fill out a contact form today. I’d love to hear from you and discuss all your hopes and dreams—big or small—when it comes to your family's finances.