Money and Marriage: Should You Combine Finances?

If you’re here, you’re either newly engaged, knee-deep in wedding planning, or now a part of the married ranks. Congratulations!

We know this is a time full of questions, but we want to draw your attention to one that requires careful consideration: Will you be combining finances after marriage?

Should Married Couples Share Finances?

Every couple has to figure out for themselves how to manage money together, and there’s no one size fits all solution that will work for every marriage. To help you understand your options, here are some pros and cons of combining finances after marriage to consider.

Benefits of combining finances after marriage

• Sharing finances is simpler. With combined finances, “You both know exactly where you are and you can plan together,” says Martha Lawton, host of personal finance-focused podcast Squanderlust. When all money is shared, she adds, it’s simpler to decide how bills are going to be paid. You also have a teammate to help you work towards shared goals.
• Combining finances could open up borrowing options. As a couple, you might have more credit options if you’re borrowing together. If you apply for credit as co-applicants or with one of you as a co-signer, the lender takes both your incomes and credit histories into consideration. You could get better rates or improve your chances of approval when applying jointly for a loan, for example.
• You’re more financially stable together. With two people’s funds and incomes to play with, couples can more easily tackle financial setbacks and get ahead on shared money goals. If one partner has variable income – from self-employment or commission-based pay, for example – “joint finances can help smooth out the highs and lows,” Lawton says. Having combined finances also helps with major life changes, such as having a child, returning to school, or changing careers. Lastly, “[i]f one of you gets seriously ill or even dies and the other one needs to take over running the household,” Lawton points out, “then having joint finances can make that easier.”
• Combining finances can build your relationship. Taking this step gives a couple the chance to learn more about each other and develop skills that support a healthy union, says Dr. Lisa Marie Bobby, a licensed marriage and family therapist and founder of Growing Self Marriage Counseling & Life Coaching, in Denver, Colo. “When couples combine finances, they must communicate, negotiate, compromise, be honest, [and] have consideration and empathy for each other’s desires even if they’re different than their own,” Dr. Bobby says.

Reasons to keep finances separate

• Money can be a trigger for fights. “If you haven’t got a combined plan and goals, then relatively minor spending choices can turn into big arguments,” Lawton says. Disagreements about finances can be a reason some couples avoid combining them, Dr. Bobby points out. Such couples might need to work through underlying issues before they can successfully manage money together.
• You want to maintain some privacy. No two people will have the exact same spending priorities, and keeping separate accounts allows more autonomy to partners who value it. “Everyone needs a bit of privacy even in their closest relationships, and it’s not unreasonable or unromantic to want to keep some of your spending to yourself,” Lawton says.
• One of you has pre-existing financial obligations. One person may bring significant debt into the marriage, or could be responsible for supporting a dependent such as a child or elderly parent. It’s important to discuss how you view these obligations and who is responsible for them. Some couples may opt to shoulder these together, but others will want to keep finances more separate to manage these effectively.
• Your own finances could be put at risk. Combining finances after marriage can be generally beneficial, but that doesn’t make it the best option for every couple. In the case of addictive behaviors or some types of mental health issues that can result in financial mismanagement, Lawton said, it can make more sense to keep money separate.

How Married Couples Can Combine Finances

Torn on whether or not to share finances? It doesn’t have to be a black-or-white decision. There is plenty of middle ground for couples who don’t feel comfortable at one end or the other.

Here are common ways married couples arrange their shared finances:

• Fully combined finances: All checking and savings accounts are shared, and both spouses are listed as owners. This couple also makes decisions together, and shares responsibility for goals like repaying debt regardless of who incurs it.
• Joint finances, separate allowances: With this arrangement, family finances are nearly completely combined, and the couple makes all financial decisions together. Each partner, however, opens or maintains an individual account with “fun money” or an allowance that they can freely spend.
• Separate finances, shared expenses: Couples keep separate primary checking accounts into which their paychecks are deposited. Each partner pays into a joint checking account, out of which shared expenses are paid. They might also agree to make contributions to shared savings goals.
• Separate finances, assigned expenses: This couple maintains separate finances, accounts, and investments. They will contribute to shared expenses or goals, likely by divvying them up — one partner might handle housing costs, for example, while the other pays the car loans and insurance.

As you consider which financial arrangement might be right for you, check out these questions that Lawton suggests couples ask themselves.

• Why are we combining finances, or not?
• How far do you want to combine?
• Will you keep your personal accounts?
• Will you need a shared bank account?
• Will you hold joint investments? What about joint debts?

Combining Bank Accounts After Marriage

Here are the to-dos you may want to tackle with your spouse if you decide to combine bank accounts after marriage.

• Combine or open joint bank accounts. Open a new joint checking account owned by you both. Or, you can visit your bank together to get added as a co-owner on any accounts you already have. This is also a good time to review existing accounts and shop around for low-fee or high-interest accounts to replace them. Just don’t forget to update your direct deposit information at work to ensure you’re paid into the correct account.
• Designate your spouse as a beneficiary. Add your spouse as the primary beneficiary for all bank accounts, investments, retirement accounts, and life insurance policies. This ensures that your spouse can get access to these funds should something happen to you.
• Set up bill payments and savings transfers. Decide which account you’ll pay which expenses out of, and set up automatic payments where you can. You can also discuss savings goals, including retirement savings and contributions, and set up automatic savings transfers for shared goals.
• Schedule ongoing money meetings. Having a set time to check in on finances weekly or monthly gives couples a built-in time to bring up and address any questions or concerns, Dr. Bobby said. It also reinforces that no matter how you choose to handle finances, you should still work as a team to manage money and grow your partnership.

How To Manage Money in a Marriage

Getting family finances in order is a joint effort that requires time, attention, and plenty of in-depth chats to cover big money conversations. On top of talking things through, here are some tips to help manage your money better.

Set money goals together

As you’re discussing what to do with your finances now, it can also be helpful to look ahead to the future. “Have a conversation around, ‘What are our five-year, ten-year, twenty-year goals for ourselves and our lives?’ particularly around finances,” suggests Dr. Bobby.

Bring up money goals that are important to each of you, and how you can work together or support each other to accomplish them. Discuss future plans big and small that require financial planning, from getting a pet to buying a home or starting a family. Record all of these goals, and regularly review and update them together.

Identify shared responsibilities

Every married couple shares some money responsibilities, no matter how they approach finances.

For example, Marie Poulin and her husband Ben Borowski, who own digital agency Oki Doki, opted not to combine finances when they got married three years ago.

“We had both been self-employed for nearly a decade, so we were both pretty independent and used to managing our own finances,” Poulin says. They continued their previous arrangement of keeping their existing personal accounts and splitting expenses in a way that felt fair.

Identify and clarify who is responsible for each cost, and how you’ll handle shared expenses. This could be paying costs out of shared funds or splitting them 50-50. Some couples also pay in proportion to what they earn, so a spouse earning 65% of household income would be responsible for 65% of family expenses and savings.

Build a family budget

“One humble and often overlooked tool is just making a family budget,” Dr. Bobby says. In fact, it’s a homework assignment she often assigns to her clients in premarital counseling.

Deciding on a budget together can show you what varying levels of combined or separate finances looks like in actual numbers.

It’s also a chance to talk about each partner’s spending habits, for better or worse. “If one person thinks they’re reasonable and the other sees them as wasteful, you’ll have problems,” Lawton says. “You need to agree [on] how you will navigate the fun spending as well as the bills.”

Agree on your financial roles

“In every family, there tends to be a person who is just better at opening the mail and updating the budget and monitoring the stuff,” Dr. Bobby says. But this spouse often winds up stuck managing the money alone. Or maybe neither person gives their money much attention.

To avoid this, Dr. Bobby suggests that couples discuss how to share money responsibilities in a way that feels fair and plays to each partner’s strengths. This could include assigning roles and tasks to each person, and clarifying which financial decisions should be made jointly.

The Bottom Line: Keep Working Together and Stay Flexible

Remember that you don’t have to get it right on the first try. There’s always room, and even a need, to make ongoing adjustments as life progresses and your finances change.

Poulin and Borowski, for example, recently decided to take steps to combine finances after some major changes to their careers and finances. What used to feel fair looked less and less like a team approach, Poulin says.

“We didn’t want money to create weird power dynamics where one of use had more influence, discretionary income, or advantage when it came to savings or retirement,” she adds. They decided combining finances was the best way to resolve these potential issues.

This is one example of how couples can keep money management centered, first and foremost, around building their relationship. “Big picture, the goal should always be for both people to feel understood, and that their values and goals are heard and not just respected but encouraged by the other person,” says Dr. Bobby.

Getting married means big changes to your world, and that includes your finances. By keeping in mind that it’s you two vs. life, and not each other, you’re already ahead of the game.