How to Combine Finances After Marriage
So, you just got married, and the next important step after marriage is newlywed budgeting. After all, your personal finances may now become your and your spouse's finances.
Now's the time to decide whether you will be married with separate finances or you will be combining finances after marriage. Financial planning and talking about money are musts.
Since money is one of the biggest causes of stress in a relationship, it is crucial to have open and honest communication with your husband or wife about finances and what that looks like for your marriage.
You may be wondering how married couples split finances, and unless there's preexisting trauma, often the best and easiest way for most couples is through shared finances. So, the rest of this post covers how to manage finances in a marriage.
How To Combine Finances After Marriage: 4 Options
While there is no right or wrong answer for newlyweds to split and share their finances, combining finances after marriage is a huge discussion. Luckily, there are some options to help your conversation go smoothly.
Completely Combined
Combined finances include having a joint credit card and bank account with your spouse.
All finances, including each spouse's individual needs, shared needs, and everything in between, come out of one account.
Pros include:
Simpler tracking of each spouse's spending habits and your joint expenses
Easier to pay bills, rent, loans, and other shared monthly expenses, as there is no monthly division of "who owes who"
A balance, mutual support, if one person's income falls
A diminished "mine" and "yours" mindset results in an "ours" mindset
Cons include:
Resentment if one partner contributes more than the other
An imbalance or disagreement if one partner is a spender and the other is a saver
More difficult to give and buy for each other because all expenses are out in the open
Completely Separate
Independent individuals keep finances separate, and each spouse has the freedom to divide their money as they like.
Pros include:
Complete financial freedom
No obligation to take over one spouse's loans, mortgages, credit card debt, or other debts
Agreement on splitting the bills. However, if you're trying to be more precise than just splitting joint bills, i.e., electricity, 50%-50%, then those calculations can get exhausting
Cons include:
Easy hiding of finances and spending, which can cause tension, worry, and/or anxiety around money
Money transfers can become stressful, especially if you're not actively tracking and planning together (even if what you're tracking is in separate accounts)
Feeling that one spouse owes money to the other like there is financial unfairness
To try and keep everything separate all the time may end up taking a lot of logistical work when maintaining separate accounts
Hybrid Accounts
A hybrid account is where each spouse has their own bank account for individual needs and purposes AND a joint bank account for shared finances.
Pros include:
A balance between "yours," "mine," and "our" mindsets
Financial freedom — more than with all joint accounts, but less than with all separate accounts
Working together towards joint goals and retirement goals
Easy tracking, at least compared with all separate accounts
Cons include:
Multiple bank accounts, which can make for more work to manage your money
Stress about having to transfer to the joint bank account monthly, especially for the lower-earning spouse when expenses fluctuate month to month, thereby affecting the amount you need to transfer that month
Proportional Method
The proportional method is actually a specific (and popular) variation of the "Hybrid Account" approach, where each spouse contributes according to their income.
For example, if one spouse earns $2,000 a month and the other earns $4,000 a month, the couple would split a percentage of the combined finances.
In this case, they would contribute to shared expenses one-third and two-thirds, respectively, based on what they can do, while also having leftover money for themselves.
Pros include:
Less or no pressure to contribute equally
Being on the same page about each spouse's responsibilities, e.g., one pays for groceries and bills, while the other pays rent and loans, or just that each contributes a certain % of the total expenses
Not having an off-balance or imbalance kind of financial situation within the relationship
Cons include:
Resentment due to your partner's overspending habits
One spouse may feel that the other partner should try to make a higher income, i.e., to allow for a higher joint standard of living. This can lead to frustration or resentment over time
Reasons To Combine Finances With Your Spouse
There's a lot to consider regarding marriage finances, but newlywed budgeting is of utmost importance to save your marriage from failing due to money disagreements. But how you should combine finances after marriage is the real question.
If you and your married spouse are having a difficult time with shared finances and asking, "should married couples have joint bank accounts," it would be a good idea to get help from a financial advisor or seek professional advice with a financial coach.
If you're interested in seeing what financial counseling for couples is all about, take advantage of my hour-long complimentary consultation!
So, what exactly are the reasons you should combine your finances with your spouse?
Fewer Accounts To Manage
When you combine finances after marriage, you're essentially transferring one of the above methods into one joint checking account.
Joint accounts or joint credit cards makes things simpler because you don't have too many accounts between which to transfer money back and forth.
One account makes paperwork easier – and the whole process of sharing finances becomes a relative breeze.
Easier To Pay Bills
Having a joint bank account makes paying bills and other important life necessities easier.
For example, you won't worry about "should we pay for dinner and groceries on my card or yours?" Also, you don't have to check in with your spouse monthly to decide who sends what to which bank account.
Instead, an agreed amount goes into the shared bank account, making sending all payments directly out of that account easier, as well.
No Weird Incentives
If you pick particular items to pay for, then the person who doesn't pay for an item may have no problem spending on that item. This can add to the overall household expenses.
For example, if I pay for groceries, and you pay for restaurants, it may be easier for me to suggest going out to eat after a full day of work. After some time, this can really add up.
This is resolved by either having joint finances or choosing a proportional method. The latter isn't perfect, but if I still have to pay, say, 40% of the restaurant bill rather than none of it, then I'll probably be more mindful and intentional about ordering in or going out to eat!
Don't Have to Track "Who Owes What"
If you're married with separate finances, it can be challenging to determine who owes what. However, the sense of equality and fairness washes over each partner when shared finances go into one account.
However, you'll need to discuss which of the above options is "fair" or fits your family best. Does the proportional method work for each partner, or is everything divided 50/50?
Removes the "Yours Is Mine" Mentality
With shared finances, each person has shared responsibilities and goals. The "yours is mine" mentality vanishes, becoming "ours."
Again, it's best to have a conversation about combining finances as soon as possible after marriage to ensure you are on the same page regarding financial goals and responsibilities.
Requirements for Combining Your Finances After Marriage
Combining finances after marriage should be discussed with an open mind, patience, and the willingness to understand each other's perspective. Other than actually agreeing to combine your finances, the three most important requirements include:
Shared Goals
If you both want to own property, buy a house, and feel comfortable in a place you'll retire, you'll contribute to a savings account for that goal.
However, if one of you has plans to invest in properties, companies, and stocks, it could be more beneficial to have your own savings account for your future goals.
Before defaulting to that, however, see how you might cultivate a partnership around whatever investments either or both of you may want to make.
Regardless, you must be willing to meet in the middle with your financial goals to support how you'll address your shared finances and how you'll work together towards these goals.
Shared Priorities
Shared priorities consist of each individual's beliefs, morals, and values. Each partner should make their own list of your financial priorities, and then you can find where you both share ideas.
From there, you can identify which finances go into joint checking accounts and which to keep separate.
An Agreed-Upon Budget
A budget can be a weekly, bi-weekly, or monthly plan to decide where your combined income is going.
In most cases, your idea of budgeting changes once you're married, so working together to create a new budget will help you identify which method of splitting finances works best for your relationship.
Tips for Making Combined Finances Work
Let's be real — no relationship is always easy. Of course, you will have arguments, disagreements, and difficult times. But when you throw money into the mix, it can make the relationship that much more overwhelming.
Navigating the transition from independent finances to shared finances is a significant change, and it will take patience and understanding from both partners. Luckily, you can take the necessary actions to help the process run smoothly.
Regular Communication
Marriages are dynamic. Even if you find a good balance, life happens, and things change immediately or gradually. Before you know it, your spouse isn't in agreement with you anymore.
Regular, open, and honest communication is crucial to any long-term, healthy relationship. To avoid this scenario, ensure you are always being fully honest with your spouse. If there is something you don't like, make time to communicate your concerns.
Establish a Clear Budget
If your monthly budget is unclear, finances can get lost in translation, and one spouse may feel that dishonesty or financial infidelity is in question.
To avoid this, make sure you understand what your spouse means when communicating, especially around your financial plan and budget.
If the budget starts to fall apart, you'll need to come together and clarify it.
Assign Roles and Responsibilities
Roles and responsibilities are important when combining finances because it requires that each person knows their duty and also takes the stress away from just one individual.
If you tend to worry about finances, if you trust your partner to handle what they take on, that may actually take a significant mental load off for you, as well!
An example of your role could be handling the rent payments while your spouse handles the bills like utilities, insurance, etc. Or, every second week, you take turns adding money to the savings and checking accounts and making sure that they are on track for your goals and bills.
Keep Clear and Organized Documentation
Keeping documentation on marriage-related taxes, life insurance, bank statements, checks, receipts, etc., will come in handy if your spouse passes away or you want a divorce.
If needed, a judge can look through the legal and financial papers in court and assess the appropriate split between partners…but of course we hope not to get there!
FAQs
How Do You Combine Bank Accounts After Marriage?
Combining your finances after marriage essentially means joining bank accounts. If you have accounts at the same bank, you can close one account and merge finances into your shared account. It should only take a few minutes to make this happen.
If you want to start with a new bank account, you must complete an application for a joint account at your chosen bank. The key is choosing the bank together, even if that means starting from scratch at a new bank.
Should You Combine Finances After Marriage or Before?
Combining your finances may make sense if you and your intended spouse already live together and share bills. A shared account helps you move toward common goals and be held accountable for your money habits.
However, some couples prefer to share only the money needed for shared bills and keep a separate personal account for other money matters. Talk to your significant other about their preference so you can be on common ground.
What Percentage of Married Couples Combine Finances?
According to Bankrate, 39% of adults completely combine finances, 38% have joint and personal accounts, and 24% have completely separate accounts.
Which Method Do Most Married Couples Choose When Splitting Finances?
Married couples seem divided on whether one joint account or a mixture of joint and separate bank accounts makes the most sense.
Choosing the one that works best for your marriage is the best way to keep you both on the same page, reduce the risk of financial infidelity, and keep each partner accountable.
A Healthy Financial Relationship
If you and your significant other are planning to get married, it's good to have the "finance talk" before you commit to tying the knot – that way, you can be clear in your financial goals and opinions about money management.
However, if you just got married and need to determine what should be shared, who needs to be responsible for what, and the commitments that come with being married, it may be in your best interest to discuss your concerns with an unbiased financial coach.
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.
