How to Combine Finances Bank Accounts After Marriage

What should you do with your finances after getting married? It’s totally up to you as to how you want to do it. The most important thing to do is to think about it and agree.

Handling Finances After Marriage

There are many small and big things that you should consider doing. Absolutely first thing is determine a monthly budget. Frankly that should have been done BEFORE the wedding. This is imperative. Do it now. Budgeting is much easier if all bills come out of one account. I recommend having at least a joint checking account for bills and a joint savings account. It is up to the two of you if you also want individual checking accounts to keep your spending money in.

How to combine marital finances?

Key to success with this method: Recognize that each person will spend money on him/herself that the other person may not benefit from. Discuss it if it becomes a problem (like one person spends an unfair/disproportionate amount on him/herself) and take steps to fix it. Communication is key, especially with this arrangement since both people will have equal access to all the funds.

 

 

Create Joint Bank Accounts After Getting Married

Joint bank account, regularly review eachothers purchases and the financial plan with eachother to stay aligned. Pay essentials first (mortgages, bills, food budget, AND TREAT SAVINGS AS ESSENTIAL). Then whatever money is left, either dedicate to a family fun budget or split between yourselves.

In my case, my wife does a lot of the shopping but doesn’t do well with paying bills or keeping track of budgets. So I basically maintain the accounts and let her know where we are in the budget. She often asks if she can buy this or that, not because she needs my permission but because I am the one who keeps track of it all.

 

Talk about finances after marriage

This does mean that I have to be careful about how much I spend on things for myself vs. her. It’s so easy for me to justify buying myself a new pair of headphones but saying no to her request for a new frying pan (boy that sounds sexist but it’s the most recent real-life example). Sometimes I have to realize that for every dollar I spend on myself, I should probably plan on spending the same amount on her.

Pros of having joint bank account after marriage:

  • We each know exactly what the other person is spending on everything and we can see how much our own spending stacks up against the other person’s spending (this could potentially be a con, depending on the people in the relationship).
  • There are fewer bank accounts to juggle/worry about.

Cons of having joint bank account after marriage:

  • If you want to buy a surprise gift for your SO or spend money on yourself, chances are they will see the purchase and amount if they monitor the account online.

There is also an argument to keep accounts separate after getting married….

 

Keeping Bank Accounts Separate After Getting Married

We keep our accounts completely separated and so far it has worked really well. I can’t say that we’ve had a single argument about money.

We divided the bills such that each of us manages certain utilities. When it comes to rent, we break it down such that we each contribute a percentage relative to the amount we bring home. So if I bring home 60% of our income, I contribute 60% toward rent. When it comes to credit cards, we each pay our own credit cards off every month.

I feel like this keeps things fair, but also gives each of us the ability to spend money without feeling trapped or at the mercy of the other person’s approval when it comes to spending. It also helps that we’re both pretty frugal in our spending. We also tend to thoroughly discuss major purchases (such as a car, laptop, etc.) weeks to months in advance of the actual purchase.

 

Strategies for Married Finances

What I think it comes down to is maturity and communication. If you communicate well with your partner and you’re mature enough to make responsible financial decisions then it doesn’t necessarily matter how you organize the money into different accounts. Separate accounts or not, if one of you can’t make good spending decisions or has a problem with impulse purchases then you’re probably going to have a bad time.

Key to success with this method: Discuss who will pay for what before problems arise and stick to it unless it cannot work for someone. Then, discuss again.

Pros of keeping bank account separate after marriage:

  • You don’t have to justify/feel guilty about your spending because it’s your money.
  • You know exactly how the money is being spent and you can adjust that spending because you have complete control.

Cons of keeping bank account separate after marriage:

  • One person’s contributions to joint causes may be greater than the other person’s contributions and may cause resentment.
  • If the people make dissimilar amounts of money, the lower-paid person may feel like even though they are married, they are not benefiting from the other person’s higher salary and that they are not truly sharing in everything.

 

Having Joint and Individual Bank Accounts While Married

The reason I have such a hard time seeing how people split it down the middle (though more power to you if you can make it work) is that so many factors go into what you have to depend on to make that work. Common issues:

  • Each partner has to make roughly the same amount of money as the other, or else the likelihood of resentment increases (either because the lesser earning spouse feels left out of the other’s spending, or the higher earning spouse feels like they are pulling most of the weight)
  • Nobody should have to compromise their career to accommodate the others, which is nearly impossible unless you’re both in the same field or both miraculously find excellent positions you both love in the same place
  • Did you know that household chores are frequent cause of resentment between spouses? With both working full time jobs, shouldn’t you split those as well? Yet many couples have a hard time finding a copasetic way to do this. And then when children come, more often than not the burden of childcare disproportionately falls upon one spouse. Is it fair that they have to do the cleaning and childcare and still work so that they can split everything?

 

Using a Joint Bank Account when Married

Key to success with this method: Decide how much (either in terms of a dollar amount or a percentage) of each person’s paycheck will go to each type of account and stick to it. If this amount does not work for one person, discuss it. If one person feels like someone is not using the joint account fairly, discuss it.

Pros:

  • We each felt like we were contributing fairly equally (percentage-wise, at least) to the joint goals of the family.
  • We each had free reign of our own accounts so we didn’t have to justify or feel guilty about any spending that came out of those accounts.

Cons:

  • If the two people make dissimilar amounts of money, one person may feel s/he should have more say in how the joint funds are used, and the other may feel helpless because s/he likely can’t control how much money they make.
  • If you don’t agree on how much (either in dollar amounts or percentages) of each paycheck will go into what account, one person may add more to his/her own piggy bank and less to the joint accounts, leading to frustration and anger on the part of the other person.

 

Financial Items to Consider After Marriage

  • Pick one healthcare provider for health insurance purposes. Cancel the other.
  • Determine monthly budget
  • Identify short term, mid-range, and long term financial goals (House, graduate education, kids, etc.)
  • Decide which credit cards we are keeping
  • Determine if life insurance is necessary at this point

Other Things to Change After Getting Married

There are also small things like change insurance policies to both names (car insurance) you will need a copy of marriage license, change name on her passports and ss card, think about a getting a will written up. We both owned home as well when we got married (2 years ago) and put each others name on the house.

One thing that is not mentioned are parents. Have you had the discussion of who would take care of either of your parents, financially and otherwise, in case something happens? This is not discussed enough and is a huge shocker sometimes to marriages.

Also, insurance needs to be altered (you can probably get cheaper rates with combined car insurance), setup beneficiaries for your IRA/401(K), and living revocable trusts need to be setup.

Having Financial Conversations with Your Partner After Getting Married

I would say that the most important way for a couple to decide what they should do is to have frequent, completely honest discussions with each other.

  • Discuss short- and long-term goals, and really focus on each person’s strengths and weaknesses when it comes to spending.
  • Pay special attention to how fiscally responsible each person is and view this realistically, not idealistically, when making your decisions about the money.
  • When you have discussions, you have to be able to keep it objective and not become emotional.
  • When discussing the money going in and out of a joint account, it is incredibly important to communicate about it frequently to ensure the other person is OK with those actions and to be sure that you each know how much money is in the account so it doesn’t get overdrawn.
  • It is also important to consider each person’s personality. Someone who is laid-back may be OK with any option, but a more forceful person might want to have more control over the money situation. For example, my cousin (who is somewhat stubborn when she wants something) used to have a bit of a spending problem and also racked up a lot of student loan debt by going to a private college. She recently got married and her husband, who (on paper) is stricter about finances, has given her an “allowance” so she can still spend money but they can also reach their financial goals. This might work for some people but because of their different personalities I think they fight about how he controls the money she gets but sometimes doesn’t apply the same restraint when he wants to buy something.

 

Financial Planning for Married Couples

Each couple will come up with what works for them, but I think being open to new ideas and being willing to really decide what financial goals the couple has will ultimately determine how (and if) they divvy up their money.

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