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.
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.