When it comes to money and marriage, honesty and communication are crucial, and different money personalities and levels of income require unique strategies. Whether you’re newly engaged or recently married, it’s important to sit down and figure out how you will handle your financials together.
First, start by defining what your goals are as a couple. Too many couples don't have a clear idea of where they want their money to go. “Do you both want to buy a house, plan a trip or think of kids in the future?” asks Angela Hansen, Financial Advisor for Prospera Credit Union. “When coming together as a combined household, you’ll need to merge these ideas and create a list of joint priorities that you both support and believe in. These priorities will help influence your most crucial financial decisions.”
Next, decide what works best for the both of you when it comes to combining accounts or keeping your money separate. Everyone thinks and feels differently about finances, no matter how much you earn.
“Joint finances mean something different for every couple,” says Mark LaHaie, Financial Advisor for Prospera Credit Union. “Some couples keep their money mostly separate and only share one or two bank accounts, while others combine everything—bank accounts, credit cards, investments accounts, and more. When it comes to combining finances there isn’t a right or wrong answer, it’s about finding the best solution for you and your spouse.”
Having one bank account offers a number of benefits. For example, sharing an account allows each spouse access to money when they need it. A few legal affairs are also streamlined with joint bank accounts. “In the event that one spouse passes away, the other spouse will retain access to the funds in the account, as long as it is a joint with rights of survivorship account,”says Hansen.
Finally, one of the main advantages of a joint bank account is that “there's a smaller chance of encountering financial “surprises” when all money goes into and comes out of one account that both of you can see,” adds LaHaie.
If you don’t want to merge finances, you can choose to maintain separate accounts, which allows couples to divvy up joint expenses and enjoy total freedom over their own finances. Although having similar incomes makes this much simpler, couples with different levels of income can separate finances by assigning more expensive items like a mortgage to the higher earner and utilities to the lower earner.
The most important thing when deciding to combine finances is to be honest about your feelings from the start and always keep an open line of communication. Money is frequently the biggest strain on relationships, but working together to find solutions that work for everyone can reduce some of the stress.
For advice on the best way to handle your finances while becoming one household, talk to your Financial Advisor. Professionals such as Angela Hansen and Mark LaHaie are there to set you both up for financial success.