How to Combine Finances With Your Significant Other - Before and After Marriage
Knowing how to combine finances with your significant other is a big step for married couples. It means you trust one another, whether that involves separate accounts or joint, to reach your common goals.
What Combining Finances With a Spouse Means
Combining your finances with your spouse is a big decision you shouldn't take lightly. If you've kept your finances separate but decided it was too hard to manage monthly expenses or create a financial plan, joint credit cards and/or banking accounts may be the best option.
There's no right or wrong way to combine your finances in marriage. You can combine all money or consider keeping accounts separate for independence. You and your spouse should have an honest conversation to determine the best route so you are on the same page.
Requirement Checklist for Combining
There isn't a specific way to combine finances, but here is a quick requirement checklist to help get you started.
1. Managing Shared Priorities
Consider each partner's priorities as you create a plan for joint finances. This is a time to think openly and to listen to each other. Discuss what you want and what's important to you financially.
For example, one partner's spending habits may differ vastly from the other. One may prioritize saving, and another focus on living in the moment. Talk to one another and withhold any judgment. Compare your thoughts and feelings and see where you can find even ground to settle.
2. Household Budgeting
As you prepare to merge finances, consider the household expenses. A budget will keep both partners on the same page, ensuring all bills are paid and that both partners follow the financial plan.
3. Pre-Marital Budgeting
Before saying your vows, talk to each other about the debts you're bringing to the marriage. For example, if you have student debt or credit card balances, be honest about them so you understand what the budget will look like when you combine finances with your significant other.
4. Newlywed Budgeting
After you're married, it's time to create a monthly budget that enforces good money management and creates a stable financial life for you and your spouse. When creating your newlywed budget, be sure to include all living expenses, savings goals, and money for any other goals you have separately and together.
5. Create a Spending Plan
Creating a spending plan is a great way to ensure you are financially secure. If you know your spouse's money habits, including overspending, create rules together to ensure you are on common ground and can find solutions to any spending issues.
For example, some couples prefer to check in with one another before spending any money, and others set a threshold amount they can spend before there needs to be a conversation. In this instance, you might run them past one another if you make large purchases but ignore the smaller ones.
Remember, what works for your relationship might be different than someone else's, and that's okay.
How to Combine Finances After Marriage
After preparing your budget, it's time to learn how to combine bank accounts and begin merging finances. This includes joining your monthly bills, such as credit cards and student or car loans, to ensure you cover your separate and shared expenses.
Complete a Marital Balance Sheet
A marital balance sheet is simply a list of your assets and liabilities. It's more common during divorce, but I consider it a good option when you get married too. Consider it like taking inventory of what you have, both good and bad, to help married couples make important financial decisions.
Handle Surprises
As you complete your marital balance sheet, know you might have some unpleasant surprises. This is when important conversations are necessary to help you and your spouse create a workable budget.
For example, if your spouse has more credit card debt than you realized or the student loans will take longer than you thought, you must figure out a plan moving forward.
Be on the Same Page
The most important thing when combining your finances is to be on the same page. This might feel impossible if one partner feels differently than another about money or one person makes more than another, but it's possible with honest communication.
Have Regular Conversations
Regular conversations are key to making your relationship work while combining your finances.
Start with your original budget, but then set times to have regular checkups and conversations about your joint accounts, financial life, and the progress you've made toward your financial goals.
Stay Neutral
Throughout the process, try to remain neutral. This doesn't mean you can't have opinions and feelings, but remember your partner feels things, too. They may not be the same feelings you have, but you can thrive if you work together to meet each other's priorities.
Honesty Is the Best Policy
Combining finances is tough, but honest communication is always the best decision. If you make a mistake, fess up; don't ignore or try to hide it.
Leave Judgement Behind
The same is true of your spouse. If they make a financial mistake, it's okay. When you have your money talk, allow both partners to have time to speak their minds. Withhold judgment and assess your financial situation to determine how to move forward.
Acknowledge Differences
Even if you have a shared account, it doesn't mean you have the same thoughts and feelings about money habits. You might find some common ground, but there could be differences, especially if one spouse has a higher monthly income than another or was brought up differently regarding money.
Coordinate Your Efforts by Creating Systems
In addition to having important conversations, you should coordinate your efforts by creating systems that work for you. This helps both partners be on the same page, even if you have a joint account.
Money Tracking
Consider using automated tools to help track spending. This ensures both partners know in real-time the status of your finances. A free app like Mint is a great way to automate your money tracking and keep both partners in the loop.
Your Financial Rules
Together, create financial rules. Again, there isn't a specific way to do this. For example, some couples set up spending rules, and others use percentages of their monthly income to determine spending thresholds.
In your financial rules, set up rules to create an emergency fund, save for short and long-term goals, and ensure all separate and joint expenses are paid.
Team Roles
Decide how you want to handle your finances. For example, do you want one person to pay bills and balance the checkbook, or do you want to split the jobs down the middle?
Give each partner specific jobs and then check in with one another to determine how the plan is working.
Learn and Re-Evaluate Your Efforts
Combining finances may be a little trial and error. You'll make mistakes along the way, but if you learn from your mistakes and create a new plan, you'll make headway toward your goals.
Consider Combining Into a Joint Bank Account
When learning how to combine finances with your significant other, it's a good idea to consider opening a shared bank account. As I said earlier, this doesn't mean you must put all your money into this account, but putting a majority of it in to cover monthly expenses and other financial needs can make combining your finances easier.
Finding the Best Bank for a Joint Account
Finding the best joint checking account is a personal decision. You can open a joint account online or in person at your local bank. The key is finding a free joint checking account with the needed features.
What to Look For in a Joint Checking Account
As you look at banks with joint accounts, consider looking for these features:
No monthly maintenance fees or an easy way to waive them
Budgeting features
Attached savings accounts for easily reaching your financial goals
High APYs on cash balances
What to Look For in a Joint Savings Account
Opening a joint savings account is also a good idea when combining finances. This account will help you reach your financial goals, while a checking account helps cover your monthly bills.
When looking for the best joint savings account for couples, consider looking for the following:
No monthly maintenance fees
A free account that accompanies your joint checking account
Automated / automatic transfer options
High APYs
Varying Approaches to Shared Finances
As I've stated a few times, there isn't a right or wrong way to combine finances after marriage. However, here are a few approaches my clients use.
Equal Financial Responsibilities - Spitting the financial responsibilities down the middle feels fair to most couples. It allows both partners to understand your financial situation and makes managing money easier for some.
You can split it however you want, whether one person handles the fixed bills and the other the miscellaneous expenses or split the bills by dollar amount 50/50. Figure out what works best for your marriage.
Financial Responsibilities Based on Earnings - If one partner makes more than another, you may split financial responsibilities by percentages. For example, if you make 60% of the household income, you might cover 60% of the bills, and your partner covers the other 40%.
One-Income Home - If you're a one-income home, you can still share finances. Just because a person doesn't work doesn't mean they don't have the capability of managing money. For example, they may have more time to handle the bills than the spouse that works.
Splitting Bills to Fit Each Spouse's Needs - In some relationships, splitting bills works better in other ways. For example, one partner may prefer to pay certain bills or handle the administration themselves. Others don't want certain bills because it's too much stress. The key is to do what works for your relationship.
FAQs
Are There Joint Bank Accounts for Unmarried Couples?
You aren't required to be married to open a bank account together. However, there aren't any laws or protections if you aren't married and split up, so be sure you're comfortable combining your finances if you aren't married.
Who Owns the Money in a Joint Bank Account?
In a joint account for couples, both people own the money. Both partners can withdraw, deposit, and see the account balances.
How Do You Legally Protect and Split Finances in a Marriage?
The best way to protect finances in a marriage is a prenuptial agreement. This dictates how finances should be split if you divorce or separate.
Should I Get a Post or Prenup Agreement?
A post or prenup agreement is a good idea to protect your finances legally in marriage. A prenup protects any money you bring to the marriage that you won't combine and any money you're concerned about that you earn or receive after getting married, should you divorce.
How to Combine Finances - The Bottom Line
Knowing how to combine finances with your significant other is important before taking that big step in marriage. If you're unsure if combining your finances is right, or you want some guidance, contact me for a consultation to ensure you and your spouse are on the same page financially.
Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!
Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.
Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.
Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.
