Combining Finances After You Are Married or Engaged

Congrats – you’ve just tied the knot! Your vows have been said, the confetti’s been swept away, and your thank you notes are in the mail. Or maybe you've just said "yes!" and are still getting used to calling your partner your "fiancé."

Whether you're newly married or engaged, preparing for a future together can be fun and exciting. Your new life will involve many questions. Where will you live? How often will you visit your relatives? Will you start a family?

But there is one question you might want to address from the very start:

Should you combine your finances after marriage?

We get it. With all the buzz surrounding your new life together, talking about money isn't the most romantic topic. But it could be the best time to discuss the subject. Tackling it at the outset of your relationship can help you avoid problems later on.

According to Bankrate, 48% of all couples argue about money. What’s worse, a study by Experian revealed that a whopping 59% of all divorcees say that finances played a role in their split.

By taking the time to join your finances at the start, you'll greatly increase your chances of living in financial harmony as the years go by.

5 steps to guide your financial planning together

Despite what financial bloggers, your friends, or your in-laws might think, there is no one “right answer” for handling joint finances. It’s all about what will work best for your relationship.

To help you create your solution, we’ve outlined five steps that will detail how you can combine your finances either before – or after – you are married.

Step one - assess each other’s attitudes towards money

Understanding each partner’s views on money is critical. While you might be well-matched in everything else, your approach to finances could be very different.

For example, is one of you a spender, whereas the other is a saver? How will you navigate your differences? Awareness of each other’s attitudes will help you build a system that works for both of you.

For a guide through this exercise, check our video about planning a financial date night.

Step two – determine your financial goals

Relationships work best when both parties are working towards the same outcomes. This can help you plan better, budget better, and maintain discipline as you move forward.

For example, it can be tough to forego a fancy dinner out with all your friends. But if you both understand that this sacrifice will help you achieve your goal of, say, buying your own home, it can be easier to stay within your budget.

We recommend writing down where you want to be financially in one, five, 10 – or even 40 years. This can help each partner see the big picture and how to achieve it.

Identify your short and long-term goals and get smart about saving together with our money goals planner.

Step three – consider your options

In general, married couples have the following options when handling their finances:

1. Combine everything – This is where you merge all your accounts, bills, and debts together. This will provide a single picture of your joint finances.
2. Hybrid plan – This is where some of your accounts and bills are joint and some are kept separate. Known as the “Ours, Mine, and Yours” approach, it can help partners share in the work and responsibilities.
3. Keep everything separate – This is where none of your accounts or bills are shared. This solution is sometimes chosen when one partner has suffered a large financial loss in a previous relationship or has made poor financial decisions in the past.

Leading financial experts’ opinions are mixed as to which system they recommend. Recent research from Indiana University has suggested that married couples with joint bank accounts have better relationships overall. But the answer is not definitive.

Again, it's all about choosing the right option for you and your relationship. Discuss the pros and cons of each. Remember, no system has to be final. You can always make changes in the future.

Step four – schedule regular discussions about your finances

This can be a challenge for many people. According to the financial technology company, Empower, nearly half of all Americans (46%) won’t discuss their finances with their spouse/partner.

This is unfortunate, considering that their partner is the person who could have the single greatest impact on their ultimate financial success.

Establishing healthy, productive, and regularly scheduled check-ins to review budgets, progress towards goals and talk about each other’s’ feelings is crucial. Make it fun by planning a financial date night (watch how here!).

Step five – test your approach

Once you have agreed on a system, you may want to give it a try-out for a pre-determined period of time. For example, you may decide that six months is an appropriate amount of time to assess whether your solution is helping you achieve your goals.

However, if either party feels uncomfortable – or believes the system isn’t working – you shouldn’t stick to an arbitrary deadline. It is important that both partners feel comfortable and heard.

From deciding who's taking out the trash, to making sure the right kid gets to the right soccer game, compromise and communication is vital to making long-term relationships work.

Remember, there is no "right" answer

In the end, the “right” system for combining finances after marriage is the system that works best for your relationship. And you can always adjust your existing arrangements to meet new requirements.

But if you take charge from the beginning, you can create a solution that will help you achieve your goals and strengthen your relationship.

And you don’t have to go it alone

While we hope this article has provided some valuable guidance, managing your finances can be both intimidating and complicated. No one is born financially savvy. It can take years to learn.

If you feel unsure about anything or would like help with your decisions, don’t be afraid to consult with experts. If you’re a member, check out our free financial counseling through our partners at GreenPath Financial Wellness. Not a member? Learn more about what we offer here.