Deciding if you should combine your finances after marriage can be a difficult choice. Here are some tips to help you decide.

Once you get married, certain decisions become inevitable. For example, you’ll need to decide whose family you will spend the holidays with, whether you want to live in the city or suburbs, and if you should buy a home or rent for a while. One of the most significant decisions you’ll need to discuss is how to manage your finances and whether or not you are ready to combine everything.

Combining your finances can be a tricky process. Like everything in a marriage, it requires a willingness to compromise and a degree of patience as you adjust to each other’s spending and saving habits. There is no right or wrong way because “joint finances” mean something different for every couple. The important thing is that you have the discussion and make decisions that support your joint goals and values.

Key Questions to Discuss When Deciding How to Combine Finances After Marriage

Here are a few of the questions you’ll need to address early in your planning process:

  • What are your goals? Create a list of shared priorities and be honest about other goals you might have that are important to you.
  • How will you handle existing debt? Whether it’s a student or auto loan or credit card debt, discuss who will be responsible for paying it.
  • Who will be the primary finance person? While you both must understand the plan and access assets, many people find it helpful to have one person control the checkbook and pay the bills.
  • Do you want a joint account or prefer separate accounts? You’ll need to decide if you’re comfortable opening a joint bank account. See below for four different ways to handle “joint finances.”

4 Ways to Handle Joint Finances After Marriage

Couples generally have four options when handling their finances.

  1. Keep finances separate with each paying their bills (and split joint bills equally)
  2. Keep finances separate and allocate specific bills to each person
  3. Combine all finances into a joint account
  4. Combine finances, but allow each spouse to keep some money to enjoy without any questions

Reasons to Combine Finances

A NerdWallet study conducted by The Harris Poll found that more than three-quarters of couples combined their finances at least partially – although it also found that more and more young couples are choosing to keep things separate (at least in the beginning).  For many, combining finances is the easiest path to take for the following reasons:

  • It eliminates the stress of tracking multiple accounts and may cut down on administrative account fees.
  • You don’t have to decide “who owes what.” For example, if you buy two cars but one costs more and is driven more frequently by one spouse than the other, how would you determine the split?
  • It makes paying bills easier and budgeting more transparent to both parties.
  • It helps you define your financial goals (such as saving to buy a house or pay for a vacation) and indicates whether you’re staying on track.
  • It eliminates “mine” versus “yours” and replaces it with “ours.”

Reasons to Keep Finances Separate

There are also legitimate reasons to keep separate bank accounts. Depending upon the person’s personality, you may find that maintaining separate finances removes the potential for disagreement. You may wish to keep your finances separate if:

  • One spouse tends to save, and the other likes to spend
  • One person enters the marriage with considerable debt
  • One person has a poor credit history

Reasons to Consider a Hybrid Approach

There is also the option of having both separate and joint accounts.  This hybrid approach involves having a joint account to manage savings and debt and private checking accounts into which a certain amount of money is transferred regularly.  These personal funds can be spent without any judgment from the other spouse.

The Keys to Success as You Navigate Finances After Marriage

Regardless of the direction you take, to successfully manage your money as a couple, you will need to establish the following things:

  • Share your goals.
  • Maintain a household budget. Budgets give you a snapshot of how much money is coming in and going out. Expenses can be a moving target, and you should adjust the budget as needed.
  • Create a spending plan. This will address how you will handle discretionary and non-discretionary expenses and how you’ll work towards your goals.
  • Be honest and open with each other. Money can be an uncomfortable subject, but you need to be straightforward with each other. Don’t be afraid to acknowledge your differences.
  • Communicate. Communicate. Discussing your finances should not be a one-time event. It may be good to schedule regular meetings to review expenses and check in on your goals.

One-third of married couples admit to arguing about finances at least once a month. Don’t let finances tear you apart. With proper planning, choosing how to manage your money after marriage can be an eye-opening experience that sets you and your partner on the path to financial success. And remember, this is an ongoing process, so learn from your past and make changes that support your combined future.