You’ve promised to love, honor and cherish. Should you also pledge to comingle, consolidate and cooperate? Here are a few thoughts on making that choice.
What does your spending and savings plan tell you?
Before you decide how you are going to tackle your money choices, you need to know what you are dealing with. Create some undistracted time to sit down together and complete a spending and savings plan, also known as a budget. This will give structure to the discussion about how money will be handled in your marriage. Make sure to dedicate time to talk specifically about your goals, as this will help you get on the same page with building your ideal financial future.
Talk about roles and money management styles.
Because of your background and personal experiences, you and your spouse may have very different habits and preferences for handling your money. Ask yourselves: if each of you got $1,000 with no strings attached, what would you do with it? If you have significantly different answers to this question, you may want to consider some division of funds that will allow you to avoid driving each other crazy.
Ease of use.
If having independent finances is going to mean struggling to remember whose responsibility it is to pay which bill each month, the hassle may not be worth the individual autonomy.
Don’t look for “magic bullets”.
You may be tempted to make the separate/shared finances decision based on something you want to create in the marriage. For example, if you don’t trust your spouse to handle money, you may encourage separate accounts to guard against potential financial failings. However, segregating money may actually create more paranoia about a spouse “blowing” money. Similarly, deciding you want to have joint accounts because you want to foster communication isn’t a guaranteed solution. You still have to do the talking. Address the real issues at hand with money management instead of picking a money management to try to style to solve them.
Respect your spouse’s past, present and future.
Successful marriages take compromise, so be willing to see your partner’s point of view. They may have taken pains to create a financial system that works well for them. Similarly, it helps to value their ability to make their own decisions. For example, once you have decided on a good amount for monthly discretionary spending for each of you, let your spouse use that money however they like. That goes for the goals they want to put their money toward too.
Consider creative, fluid solutions.
Your solution doesn’t have to be all-or-none; a hybrid approach just might be the way to go. You could have three accounts: one for your collective expenses and goals and one each for your individual spending money. Or you could even have separate savings accounts. Setting up direct deposit into the separate accounts based on the figures from your spending and savings plan will make divvying up the money simple. Remember too that the decision on joint or split finances, unlike your marriage, isn’t designed to last forever. Check back in with each other after a couple months to see how you like the way things are going.
The credit/debt issue.
If one of you brings poor credit or large amounts of debt to the relationship, it can make sense to keep things separate for a while. With credit, you will find that having separate accounts can help to ensure at least one of you is able to build or maintain a positive history. This can be important down the road for larger loans you may need or want to take out. For larger debts, entrusting the responsible party to handle the debts on their own can help stave off discord from one partner feeling like they are “bailing out” the other. Pulling credit reports for each of you can help spell out what each of you may need to do to get your credit in position to accomplish your goals.
In the end, this decision really comes down to what feels best for you. If you decide to have separate accounts, it doesn’t mean you love each other less. If you decide to have joint accounts, it doesn’t have to limit your personal freedom. By making a commitment to communicating, keeping an open mind and periodically reviewing your financial process, you can create a system that actually adds harmony to your marriage.