Should Married Couples Merge Finances?

by Kristina on August 21, 2015 · 2 comments

merging finances, couple finances, finances and marriage

Here’s a question that a lot of couples want to know: Should married couples merge their finances?  I am not sure there’s a right or wrong answer.  If I base my answer on my relationship I would say no, but that’s what works for us.  However in some situations it’s easier for one person to manage the household finances.

I don’t think couples should be figuring out how to merge their finances after tying the knot, I think the better question would be, do we need to comingle our money as well as cohabitate?

Here are five situations when it makes sense for married couples to merge their finances:

Only one spouse has an income

When one spouse is responsible for the family income I think it makes sense to merge family finances for equality. Maybe not all accounts need to be joint, but each spouse should have access to at least one account for the household expenses.

If the non-income-making-spouse has to constantly ask the breadwinner for an allowance or for permission to spend money the situation may get a little testy.

Your spouse has bad credit

As a financial planner my advice is always to keep finances separate, especially if one person has a history of financial struggles and a poor credit score.  However, the rules change when it comes to marriage because it’s for richer and poorer.  If my spouse had bad credit I would want to help them rebuild it.

I probably wouldn’t give them access to my higher limit credit cards, but I would offer to open a joint credit card (with a lower limit) or co-sign for their own application.  Having both spouses in a good financial place can only help the couple as they move forward together and want to buy a house, or car etc.

You’re traditional

I may be completely naive, but I think keeping finances separate is a common trait of the younger generations.  My parents had both names on everything they owned, except their retirement accounts and that was only because it legally wasn’t possible.

Now that being said my parents are divorced and money was a major contributing factor to their unhappy marriage.

You both have similar values

There’s a level of trust that comes with merging finances.  That’s not to say that couples who choose to keep their money separate lack trust in their relationship, it’s just that there is a big level of trust that comes with joint accounts.

There is also a level of responsibility that comes with managing something together.  This is where good communication skills come into play.  A key success factor when married couples merge finances is the willingness to be open and talk about your money.  If you’re ready to do that then joint accounts could work in your benefit.

You want to save on bank fees

Two accounts equal two monthly bank fees.  If you merge your finances you cut those fees in half.  However, finance can be a big source of stress in a relationship so if you aren’t on the same page when it comes to spending and saving or even how to manage your money maybe it’s a good idea to keep your finances separate until you see eye to eye.



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{ 2 comments… read them below or add one }

1 mp August 24, 2015 at 1:16 pm

My wife and I have never had joint accounts. Mainly because we had always heard it was a big source of problems for marriages. We split bills based on incomes percentages and basically don’t have money issues. We’ve been married for 20+ years now and never have money arguments. If she wants shoes she buys them. If I want electronics I buy them.

We both fully fund our 401k and roth IRA (which I manage for us), other than her name is on her car, etc. That way if something happens to me she’ll have credit in her own name (actually her credit score is slightly better than mine 818 vs 801).

To us, we would never do it any other way.

2 kg September 8, 2015 at 9:26 am

I think it depends on the age that you marry, the spending styles, the finances of each individual partner, and how well you communicate tough stuff to each other.

We were poor and young when we married over 30 years ago, so we basically grew up together. When we started out we were cash based and used the envelope system to pay our bills. Right now our wage income goes into a joint account that we use to maintain our household and pay each of us monthly allowances which we can spend or save as we please. So we do have separate money too.

A few years ago we started a business to run when we retire from wage jobs because our retirement accounts which we started in our 20s will not be enough to retire on even though we are frugal and live beneath our means. No smart phone. Just free TV. We will not be getting pensions and have always earned working class wages. As long as we keep healthy we will be fine. This business has its own accounts and money which is currently being used to grow and maintain the business.

If you’re older and getting married, you may come to marriage with debts, assets, and other financial obligations. Hopefully you will be honest with each other and set up a financial plan that works for both of you.

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