Combining Finances after Marriage

It's more than about sharing the same bank account. 

Two people fall in love and decide they want to spend the rest of their lives together. They get married, move in together, and build their lives. Even though they have chosen to combine everything else about their lives, money and finances can be one area where they instinctively protect from each other and refuse to consolidate.

Couples That Merge Finances are Financially Stable

Couples that combine their income and accounts are more financially stable than those that do not. Keeping accounts separate will make it more difficult to understand how much money the household really has access to. Not only that, combining finances creates spending accountability partners.

Here are some things you can do to merge the family finances without causing too much heartburn.

Choose One Bank Account

You probably both like the bank you are with, but it is time to pick one and stick with it. For the sake of convenience, it is easier to go with an account that is already open.

However, some people need the mental switch of opening a new account together. Whatever you decide, have one account that all of your money is run through – this means depositing paychecks, paying bills, and withdrawing cash.

Make a Comprehensive Yearly Budget

Take time to create a comprehensive budget at the start of each year. This is not as hard as it sounds. Add up all expected income you and your spouse will receive. Then create a list of all the bills that are expected during the year. We have a budget template that makes this easy.

Your budget should include needs such as: home essentials, food, clothing, entertainment, and gas to name a few. Don’t forget to include savings in your budget as well, both emergency funds, and retirement savings.

Also, you should budget for unexpected expenses such as medical bills and repairs. When unexpected bills arise, you can feel confident that you are able to pay them because you already planned for them.

Just by doing these first couple steps you and your spouse will begin to understand where your cash goes.

Create Guidelines For Spending

One of the reasons couples have a hard time merging their income is they feel they won’t be able to freely spend their money. It is true, you will have someone you are accountable to, but that's not a bad thing when it comes to spending.

Think of having a budget as giving you additional freedom in spending. As long as you are sticking with what you and your spouse decided, then you can spend without danger of going in the red or upsetting each other.

It is important to have some rules in place with spending. If you want something that does not fit into the budget you created, then you need to run it by your partner. Going over budget is something that should be agreed upon. All major purchases should be discussed by both you and your spouse.

Make Your Spouse a Beneficiary

There is more to family finances than just income and spending. It is important that you name your spouse as a beneficiary on any assets you have. This can include insurance policies, CD’s, and retirement accounts. Should something happen to either of you, your spouse will receive the money from these sources without having to deal with probate, which can be costly in terms of both time and money.

It takes a lot of trust to combine finances, but it is necessary for a couple to reach their financial goals. Money is a huge source of fighting within marriages, the key is to deal with the issues head on from the start and communicate with each other.

For an additional resource take a look at our Wedding and Financial Planning Guide.

If you need additional help organizing your financial life feel free to reach out, that’s what we do!