Tips for Couples Combining Their Finances After Marriage

Working together to manage your money may make life easier.

Figuring out how to manage money as a couple is a continuous journey. And it’s about more than just handling bills; the key is working together toward a shared (and successful) financial future.

Here are some tips you could use that may make the process easier.

Key Takeaways

• Merging finances as a married couple requires open and honest communication with your partner.

• Flexibility is essential, whether you fully merge all accounts or maintain some autonomy.

• Combining your finances gives you the chance to align your visions for the future.

Two Merging Philosophies

Finding the best way to merge your finances as a couple is a personal decision that involves communication and compromise. There’s no one-size-fits-all approach, but the two most common models are “fully merged” and “hybrid”. Here’s how they work.

• Fully merged finances: In this model, both partners share equal responsibility for all financial decisions and responsibilities. They’re listed as co-owners on most or all accounts and work together to make choices about purchases and financial goals.

• Hybrid finances: In this model, each partner maintains some autonomy over certain financial decisions while working together on others. The amount of autonomy is up to you but may include joining money for shared expenses and keeping money separate for other costs.

Ideally, you would’ve discussed money and combining finances before getting married and chosen a merging philosophy. If that conversation didn’t occur, and you’re in the midst of wedded bliss, take time to evaluate your merging approach and if you’d like to change your approach going forward.

No matter how much pre-nuptial preparation occurred, remember that marriage is a journey and so is achieving financial wellness together.

How to Combine Finances After Marriage

As life changes, the way you manage your finances together may change too: through job changes, the arrival of children, purchasing a home, etc. These tips are meant to help you kick off your planning and inspire you to collaborate in your own, unique way. They could also help you to realign as you revisit and revaluate your financial strategies throughout your marriage.

Discuss Your Financial Goals

One of the most important things when combining finances is to make sure you’re on the same page about your financial future. Identify significant financial goals like building emergency savings, buying a house, having children, and planning for retirement. These discussions help you create a strong foundation for future financial decisions.

If you’re taking the fully merged approach, discuss the financial goals you have, prioritize them, and determine how you want to go about achieving them. This may involve setting money aside each month for each goal or setting spending limits on certain purchase types.

If you’re maintaining some separation between your finances, the process may be a bit more complex. Discuss your personal goals with each other and identify which goals you want to work toward together. Then, figure out how you want to allocate funds toward your individual and shared goals.

Create a Money Management Plan

Everyone comes to a relationship with a different money management style. Some people are budgeters, and some people aren’t. No matter where you and your spouse are, creating a money management plan could increase your chances of success.

For couples completely combining their finances, track your expenses closely by looking at how much money comes in and where it goes each month. This may make it easier to create a budget and identify ways to boost your savings to help you reach your financial goals.

For couples who aren’t combining all of their finances, start by deciding which expenses you plan to share and how much each of you will contribute to those expenses. You may need to set up a budget to help you stay on track. Keep in mind that you may not contribute to shared expenses equally—you just need to agree on how much each of you is responsible for.

Open a Joint Bank Account

Joint bank accounts list both partners as account holders and give them equal access to the funds in the account. Opening a joint account with your spouse may make it easier to combine finances and keep track of your spending, whether you’re combining all of your finances or just your shared costs.

Joint checking and savings accounts are helpful for either merging philosophy. For couples fully merging their finances, having shared accounts may make it easier to track their spending and set money aside toward savings goals.

For couples taking the hybrid approach, joint accounts may be useful for handling shared expenses and savings goals. Each partner may choose to maintain separate accounts for their other funds.

As you look for an account, be mindful of the fees and costs associated with the account. Some banks may charge fees or have minimum balance requirements in place that could make keeping your money there costly.

Consider Opening a Joint Credit Card

Once you get married, you and your spouse may want to share credit cards. For couples taking the fully merged approach, you may choose to do this with all of your credit cards, while hybrid couples may choose a few cards to share or none at all.

Joint cards give both people equal ownership of the line of credit, allowing each to use it as needed. But that equal ownership also means you’re equally responsible for the balance. Make sure you’re comfortable with the idea of sharing debt before you apply jointly as you both are responsible for repayment, regardless of which person made purchases.

Not all credit cards offer a joint option. In that case, one partner is listed as the primary account holder and could name the other person as an authorized user. For couples taking the hybrid approach, having primary and authorized users for credit cards may be the preferred approach anyway.

In the case of authorized users, normally only the primary account holder is responsible for paying off the balance. Review your credit card’s terms of service for more details.

That said, depending on the state you live in, you may be jointly responsible for each other’s debt regardless of how it originated… it’s one of the “perks” of marriage, or in some cases, even domestic partnerships.

If you live in one of the nine “community property” states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) debts taken on during your marriage by either spouse is owed by both of you.¹ There are some exceptions, but generally if you live in one of these states and either of you opens a loan or runs up a credit card, both of you are on the hook for paying it off.

Be Open About Your Individual Debts

Most married couples build a joint plan to pay off joint debts together. But you may also have individual debts acquired before the marriage.

Hopefully you disclosed and discussed your individual debts before you got married. If not, it’s important to put all that on the table for discussion as soon as possible.

If you decide to merge individual debts into your overall finances, talk through your goals and consider how you want to structure your debt payments together.

If you’re trying to maintain independence over your individual finances, your spouse may not contribute their income toward your debt payments. This should factor into your joint planning, regardless, as large individual debts may impact the ability to contribute to joint expenses and goals.

Consider Your Investment Goals

If you’re saving for retirement, your retirement accounts, like an IRA or a 401(k), stay separate even once you’re married. But if you’re considering investing in stocks, bonds, real estate, or other investments, you could keep things separate or combine your efforts into a joint account.

There is no right or wrong choice, it just comes down to what you and your spouse are comfortable with. If you both want to invest in the same types of funds and plan to use the proceeds together, a joint account may be a good option. But if you want to keep your finances separate or have different investing philosophies, maintaining individual investment accounts may be a better choice.

Discuss your options with an investment or tax professional as combining accounts may let you save money on fees and could lower your tax liabilities.

Talk About Taxes

As mentioned, combining finances as a married couple could have an impact on your taxes and your tax liability each year.

If you file jointly, your earnings and tax liabilities are combined, but you may also be eligible for several tax credits which could decrease what you owe.² If you file separately, you’re each responsible for your individual tax liabilities and may not qualify for the same tax credits.

Since every couple’s tax situation is unique, speak with a tax professional before you make a decision on your filing status. They’re able to review your situation and recommend the best option for you.

Final Thoughts

Financial conversations like these may not be the most exciting part of married life. But communication could make a big difference in your shared financial wellness, regardless of how you’ve combined your finances.

Just remember that managing your finances together isn’t just about dollars and cents. It’s also about building a solid foundation of trust, teamwork, and shared aspirations for a prosperous future together.