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Money & Marriage Part 2: Merging Your Money

Money & Marriage Part 2: Merging Your Money

October 04, 2019

Our Money & Marriage series continues by going back to the very beginning… of your relationship with your significant other! At some point, you’ll consider combining finances: whether you’re living together, getting engaged, or anticipating a wedding in the very near future. It can be a tricky situation to merge your money, so here are a few things to consider.

Your Relationship Status Matters

You may be in a serious, committed relationship and want to take the leap of moving in together. How should you share in those household expenses? Many experts advise setting up a household budget to pay for expenses like rent, food, utilities, etc. You can divide the expenses right in half, or each of you pays a percentage based on your income. Keep your individual expenses separate: things like your car payment, debts, insurance, clothing, and entertainment. You may love one another, but for the purposes of paying for your living arrangements, you are roommates. It’s not a good idea to set up a combined bank account at this stage because relationships can and do end. Each of you would have equal access to the money in the account, and nothing would prevent the other from emptying it out. You’d have a money headache along with heartache!

What happens when you get engaged? You can start taking baby steps toward merging your money. If you’re paying for the wedding yourselves, it makes sense to open an account together to make those payments. However, even with a ring, there is no additional legal protection. In the event the engagement ends, you’d still have a money mess to clean up!

[One additional note here: most experts agree buying a house is a very complicated situation before marriage. You are buying a piece of property with someone you are not legally bound to. If you split up, it could be a big blow financially. If you are determined to purchase a home together, you need to visit an attorney to make sure it’s fair to both of you.]

After You Say “I Do”

After the wedding and the honeymoon, real life sets in! Now is the time to combine your finances, although some couples still opt to keep separate accounts. If you or your spouse don’t want to combine, spend some time talking about the reasons why.  

For couples who do want to merge their money, there are several steps you can take:

1. Develop a budget.

There will now be two of you spending money instead of just one. You both need to know how much you can spend on clothing, gas, and groceries, and stick to it! I will never forget standing in the checkout lane at the grocery store trying to buy ingredients to make my husband’s birthday dinner, and having my debit card rejected. It was two months after our wedding, we had not bothered to set a budget, and it got us.

2. Plan to pay off debts.

Hopefully you shared your overall financial picture with one another before the wedding. Finding out your spouse owes $250,000 in college loans after the vows is probably not the best way to start a marriage! Once you become married, it’s no longer just your debt. It’s ours. Deciding how to deal with it ensures you’re both on the same page.

3. Open both checking and savings accounts.

Part of setting a budget includes saving for the future and any shared goals you have. Both accounts are important to your overall financial stability.

4. Gradually move everything over.

This can be a daunting process, with so many direct deposits, automatic withdrawals, and online payments. Banking experts suggest printing out one full month of transactions, and go through it line by line. Shift things over to the new account as you’re able, keeping your old account open just in case you miss something. It’s a process, but easily accomplished by doing a little bit at a time.

5. Talk about it!

This is the big one. Have money conversations regularly! Talk about areas where you may be overspending. If my husband and I had done this in the early days of our marriage, I would have known that he had just paid his car registration renewal so there wasn’t as much money in our account as I thought! Talking and looking at your spending is essential. Maybe your original budget was not realistic. Give each other grace. You’re both learning how to manage money together, and there can be a steep learning curve!

In many relationships, one partner may show more interest in money matters. That’s fine! Everyone does their part: one of you may be balancing the checkbook while the other may mop the floors! Just make sure that both of you are involved in money decisions. It could make for a much happier and less stressful marriage!