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Newlyweds Guide to Merging Finances After Marriage

Up until now, your financial decisions affected only you.

You had no one to answer to and only yourself to blame or thank for your financial situation.

Then you decided to get married...

Deciding if, how, and when to merge your finances with another person's is a complex issue, and there's no right or wrong answer.

There's no way around it—intermingling your money after matrimony is hard, and some couples have trouble deciding the best way to approach it.

For my wife and I, it was really a non-starter to begin our lives together with separate finances.

"Always combined, always succeeding," we told each other—a motto that, to this day, is the centerpiece of our magnetic fridge collage.

The underlying thought process was pretty basic:

If we kept our finances apart, we would be inadvertently putting distance between us.

Instead, we came to the conclusion that the fundamental key to building a strong marital foundation was removing the guesswork around money, a top 3 (if not the number 1) reason why most marriages fail.

In other words, the key was transparency.

Still, it's not always sunshine and roses…

For one, try buying your spouse a really nice gift for an anniversary with a shared bank account, ha!

For another, everyone has different backgrounds, money habits, and values when it comes to how they spend and save their hard-earned income—and these can lead to problems down the road if they're not tackled upfront.

Consider a couple who gets hitched without having a larger discussion about finances.

It won't take long for one partner's debt or overspending to come into light.

Once you share a life and a home with someone, you'll have to deal with a myriad of money issues.

Do any of these sound familiar?money and your partner

Such scenarios can cause all sorts of arguments, or those dreaded "What did I get myself into?" second thoughts.

How couples handle different financial philosophies, incoming debt baggage, or big money decisions will go a long way toward the ultimate success of the relationship.

However, many couples aren't putting in the work that comes with joining their finances.

Just 51% of engaged couples said they intended to equally share financial decisions, and only 37% of married respondents say they actually share the responsibility equally.

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Let me tell you that my married life is not scripted by any means. It's very give-and-take, especially since we had two young kids.

My wife and I always credit our positive relationship to making the decision to share a bank account early on.

We knew that starting off on the wrong financial footing, or being clueless about each other's cash flow, wouldn't be helpful for our marriage.

We didn't want to fight about money and thought that if we started out openly with each other, then we'd be off to a better start.

It turns out we had a good thing going for us, even though we didn't really know it at the time.

Having secrets—especially ones about money—will increase the odds that the marriage will be tested to a breaking point.

Couples who fight about money regularly might be on the road to divorce, according to Sonya Britt, a Kansas State University researcher who penned a study "Examining the Relationship Between Financial Issues and Divorce" for the journal, Family Relations.

If you don't resolve money disagreements early on in the relationship, you could doom your marriage from the start, explains Britt.

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The good news is there are some tried and true steps you can take to ensure that you and your partner really can be happy together, "for richer or for poorer."

Plus, couples who successfully navigate finances together have stronger relationships overall, according to TD Bank's Love and Money Survey.

It found that 78% of couples who talk weekly about money say they are happy as opposed to 60% of couples who talk every few months, and 50% who talk dollars and cents even less frequently.

Even if money topics tend to spark heated arguments that lead to someone sleeping on the couch, not communicating has far worse consequences.

By investing time and energy into building an always-open conversational door in your new marriage, you can develop a customized plan for dealing with financial matters.

Through regular, honest communication— yes, newlyweds can live financially happy ever after.

It may seem like an insurmountable challenge right now, but it's not.

Here's how to successfully merge your finances after marriage.

1. Communicate about money and reap relationship rewards

Disagreements over money are one of the biggest causes of marital strife.

No couple can be truly happy and fulfilled if they don't get this area of their life handled.

That's because tied up in dollar disagreements are deeper relationship issues, including these biggies:

Lack of trust. One of the biggest fights that can occur over money is when a partner is not honest with their spouse about it, say Marlow and Chris Felton, authors of "Couples Money."

money quote 2According to the Experian Credit Score Newlywed Survey Report, 15% of newlyweds said they have a bank account that their partner doesn't know about.

Feeling restricted. When money is equated with power, it can set up a scenario in which the spouse who controls the purse strings makes all the decisions, and the other partner feels trapped.

Feeling unsafe. In some extreme situations, such as if one spouse has a gambling problem, that lack of financial security can really weigh on the other partner.

The same goes for a situation in which one partner is out of work and doesn't seem motivated to find a job.

Feeling unsupported. Marriage is supposed to be a partnership, including supporting each other through ups and down–even financial ones.

Perhaps one spouse wants to go back to school for an advanced degree, but the other isn't willing to make the financial sacrifices necessary to make it happen.

That can be a big source of conflict.

Beyond these emotions, everyday bickering about money can cause serious wear and tear on a relationship.

In short, money is the root of many marriage evils.

In fact, a survey of Certified Divorce Financial Analyst (CDFA) professionals across North America found that cash conflicts were the cause of 22% of divorces (only "basic incompatibility" and "infidelity" scored higher).

Here's a deeper look at some of the major money-related marriage problems, and why communication is key to combatting them:

  • ground rules icon

    Prevent financial infidelity by setting ground rules

Having to get permission from your spouse about all of your purchases can be humiliating, and can lead couples astray.

"Especially when you find yourself having to defend a purchase that your partner doesn't endorse," says Jennifer Ryan Woods, a financial writer and Forbes contributor.

If you find yourself fighting over her $30 nail salon splurge or his round of golf, you can fall into a pattern of not wanting to communicate at all.

Agree on some wiggle room.

Here are two methods that work in many marriages:

1. Pick an allowance amount.Select an amount of money that you're each allowed to spend per month, no questions asked. You may decide that each partner will be allocated $200 of "fun money."

One spouse might use it up on personal indulgences, another might save it up toward a larger ticket item.

Either way, you both agree not to pass judgment on how the other spends their money.

2. Set a purchase limit. Perhaps you decide that each partner can spend their discretionary income however they want.

Still, you might want to decide in advance when a check-in is required.

"It may be $50, $500, or $5,000, but each partner in a household should know what he or she can spend without telling the other.

"Budget items, like wholesale club-runs for groceries, are exempt from this rule. Pulling up the driveway in a new car you forgot to mention is not," says writer Sally Herigstad on the TaxAct blog.

By carving some money for each person to splurge, guilt-free, and setting some ground rules, couples are less likely to engage in secret spending or hide credit card receipts.

After all, if you have your own money to spend, you don't have to face the "did you really need another pair of running shoes?" interrogation.

Plus, it saves your partner from having to assume the role of "nagging spouse."

  • Schedule icon

    Schedule regular money dates to stay on the same page

Blogger Kumiko Ehrmantraut, aka "The Budget Mom," recalls what it was like in the early days of her marriage when she and her husband didn't communicate about money.

"I was such a control freak when it came to our money; I left him standing on the sideline. He had no clue how much our bills were or what we were responsible for paying. Since our paychecks were combined into one checking account, he never saw his paycheck. I allocated it and had it spent before he even knew he got paid."

She came to learn that it's important that both people to understand what their financial obligations are, as well as plan for future large purchases together.

"The feeling of resentment can easily be avoided if you discuss and understand where your money is going," Ehrmantraut says.

Find time for financial chats

Here's a step-by-step guide for managing your money meetings, courtesy of Holly Gillian Kindel, CFP:

  • Compare calendars to carve out a reasonable slice of time
  • Collaborate on an agenda, which can include the monthly budget, upcoming gift-giving how to use the tax refund, etc.
  • Allocate time for each topic and stick to it
  • Establish rules of engagement, which can include allowing each other space and time to express feelings and thoughts
  • Decide how to call for and respect a time-out if the conversation gets heated
  • Agree on follow-up steps and deadlines
  • Do something afterward that you both enjoy as a reward—like a coffee and dessert date

Staying on the same page will keep everyone accountable, and allow each partner a chance to share their input.

It can make the difference between facing the silent treatment for lending your brother money without bothering to mention it, and enjoying some "Netflix and chill" after a productive chat about how to lower the electric bill.

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    Focus on dollars and cents to take the emotion out of money discussions

As alluded to above, money fights often have nothing to do with financials–it's about how one partner's money decision or lack of communication made the other person feel.

In fact, a 2016 survey from the American Institute of CPAs (AICPA) found that 88% of adults married or living with a partner say that financial decisions are a main source of tension in their relationships.

Think like an accountant.

When you sit down for your money talk, make sure you have all of the relevant information available, such as bills/statements and any other financial records, suggests Leslie Tayne of Tayne Law Group, P.C., financial debt attorney and author of "Life & Debt."

Seeing what household bills actually cost can be eye-opening to the spouse who isn't doing the checkbook balancing, and make him or her realize why it's important to stick to the budget.

Likewise, you can cheer each other on by sharing progress reports on other goals, whether it's getting closer to debt-free status, or saving for summer vacation.

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    Work on an emergency fund to fight future financial stress

Whether it's sickness, job loss, or a leaky roof, taking a hit to your income or savings and/or accumulating debt as a result is stressful.

Yet, two-thirds of Americans would have trouble coming up with the cash to cover a $1,000 emergency, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research.

Think about it:

If the brakes on your car went right after your partner made a large purchase you didn't approve of, it would be hard not to resort to finger-pointing.

Bulk up your rainy day fund

Setting money aside in an emergency fund is the best way to combat inevitable unplanned expenses that might arise.

Start by automating a fixed amount from each paycheck into a separate savings account, even if it's just $50 to start.

Your first goal should be to reach $1,000, but then keep growing it.

Money expert Dave Ramsay recommends that couples with two incomes have at least three months of living expenses set aside.

"The key is that each spouse must agree to not touch these funds without the other's agreement. This keeps the emergency fund from being used to buy big-screen TVs or designer pocket books," says blogger J.D. Roth, founder of GetRichSlowly.

Having money at your disposal when the hot water heater goes will not only keep you out of debt, but it will minimize the financial stress that leads to fighting.

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  • Share the work icon

    Share the work

Does this sound like your home?:

One of you sits seething in front of a spreadsheet with a stack of receipts, while the other one happily eats ice cream straight from the carton and catches up on "Dancing with the Stars"?

For many couples, the bulk of the financial bookkeeping (paying the bills, banking, etc.) falls to one person.

But that doesn't mean he or she has to do everything, or that the other person should be kept in the dark.

Delegate jobs

Say, for example, one spouse does the shopping and pays the bills, and is therefore more savvy about everyday budgeting items.

On the other hand, the other spouse might be more interested in monitoring big-picture financial goals like retirement investments, keeping track of receipts for taxes, or looking into home refinancing options.

Have a discussion about who is responsible for what so that there is no confusion or worse—missed payments that result in late fees or other consequences.

If you find that both spouses loathe balancing the checkbook, perhaps you can work out a compromise in which you take turns.

Finally, no matter who does the bookkeeping, stick to those money meetings and make big financial decisions together.

If there's one final rule that applies to all of these situations, it's this:

Every couple's lifestyle and relationship with money will be different.

Therefore, it's up to you and your spouse to work together to communicate regularly and cultivate the routines that work best for you.

But don't just take our word for it—as revealed in an Ameriprise study on couples and money, open communication is a major hallmark of a healthy relationship.

The study found that among happy couples, nearly seven out of 10 (68%) describe communication over finances with their spouses/partners as "perfect" or "very good."

That means it's true what they say:

Money talks or frustrated spouses walks (to the divorce lawyer!).

2. Learn the pros and cons of combining finances so you can maximize yours

Learn the pros and cons of combining finances

Partners usually have different beliefs, habits, fears, and values surrounding money, which can make it difficult to agree on how money should be managed.

In general, people fall into two categories:

Spenders and Savers:

  • Spenders

    Spenders approach their finances from the "you can't take it with you" perspective.

    • They want to enjoy the finer things in life.
    • They don't mind carrying a little bit of debt to get the things they want.
    • Being married to a saver might make them feel restricted.
  • Savers

    Savers find comfort in knowing that they have money set aside for a rainy day.

    • They value their top-notch credit scores.
    • They are willing to make sacrifices for long-term stability.
    • Being married to a spender might make them feel unsafe.

Although couples that have the same spending style will have to compromise less, saver/spender pairs can actually complement each other very well–sort of like a system of checks and balances.

It involves learning to respect where the other is coming from and finding a middle ground, and it takes work to get there.

For starters, there's a lot of emotional baggage attached to one's money preferences.

"If someone came from a family in which money caused major problems, they might be more fearful of letting someone else share control of their finances," says money strategy reporter Shana Lebowitz.

Difficulties can also be exacerbated when one partner earns more than the other.

Some of the related issues can include the lesser-earning spouse feeling guilty for not pulling his/her weight, or the primary income earner making all of the decisions, says personal finance writer Casey Slide.

If you have different money personalities, income disparities, or both, you'll have to decide whether or not you want to combine finances.

Start by exploring some of the benefits of combined and separate finances.

  • combined finances icon

    Advantages of combined finances

You can support each other, "for richer or for poorer."

"Marriage should be about partnership. If you're up one day and your spouse is down, tomorrow it might be flipped. You have to be there for each other no matter what. And that goes for money as well," says columnist Laurent Spagnoletti.

Being accountable to another person and shared goals can help you spend more responsibly.

The carefree attitude you might have had as a single person living with roommates will likely change when you're aiming to buy a home with your spouse, start a family, or thinking ahead to retirement.

Merging your household's finances can simplify budgeting.

When one account receives the entirety of your household's income and remits all of its day-to-day and recurring expenses, it's much harder to miss a payment out of forgetfulness or lack of organization, says MoneyCrashers writer Brian Martucci.

  • separate finances icon

    Advantages of separate finances

Maintaining some autonomy.

If you both prefer to have some financial freedom, and you both earn income or have your own savings from before marriage, keeping separate accounts allows for that.

It also helps to avoid one spouse having "power" over the other.

Each person's individual credit score is protected.

Joint accounts can affect each person's score, even if it's your partner who does the charging and paying (or not paying).

Negative payment activity can show up on both cardholders' reports, damaging both credit scores.

It brings some meaning back to gift-giving.

"If spouses buy gifts for each other from their separate accounts, it requires some sacrifice and planning as opposed to grabbing the communal credit card." That's from Joe Pitzl, principal at Intelligent Financial Strategies LLC, in a BankRate article.

Whether or not you combine financial accounts, you'll still be sharing financial lives if you live together, are raising a family, and plan to grow old and retire as a couple.

For many couples, a hybrid solution ends up being the answer.

According to research by TD Bank, 42% of those in relationships who have joint bank accounts also maintain individual accounts.

The key is figuring out the right balance for your relationship.

Depending on each person's financial baggage going into the marriage, as well as any reservations or fears you may individually have, you can determine the degree to which you should join your finances.

Whatever solution you choose, it should allow both parties to feel safe, comfortable, independent, and reach both individual and mutual goals.

Here's how...

3. Merging your finances

combined finances solution

Now that you've examined why it's important to communicate about money and contemplate the pros and cons of combining finances, it's time to explore the different ways in which you can merge monies.

There are several options to explore, and one of them will surely be ideal for your relationship.

This is not something that you should put off–in fact, you should discuss these options before you walk down the aisle.

That's because once you're living together and start making plans for the future (like buying a house, having children, and growing old together), your perspectives on money will either bring you closer together, or can have the potential to tear you apart if you don't work through differences early on.

Take a look at some of the ways that couples are combining finances to identify the one that is best for your marriage.

  • Yours, mine, and ours icon

    Yours, mine, and ours

How it works:

You'll keep most of your finances separate, except for one joint account to which both people contribute equal amounts.

"Some happily married spouses recommend maintaining three bank accounts: a joint account and one for each partner. They pay household bills from the joint account," says Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network.

Try it if:

You and your spouse have a similar income and want to handle pre-wedding debt (like student loans) separately.

Get it going:

  • Open a joint checking account from which you can pay the household bills.
  • Divide those expenses in half (you can pad it a little for extras that come up) - that's how much each person should contribute each month.
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    Income-based account sharing

How it works:

Calculate shared monthly bills, and make contributions to a joint account that's proportional to each person's income.

Try it if:

One spouse earns a much higher income than the other, but both still want to contribute. "By splitting the bills this way, one person can not accuse the other of having extra funds to play around with at the end of the month," says Adam Hagerman, CFP. "Based on your income, you are paying your fair share."

Get it going:

  • Take a look at your combined total monthly income.
  • Figure out the percentages coming from each person.
  • Have each person contribute that same percentage to the shared monthly expenses.

As an example, if one partner earns $50,000 and the other brings in $100,000, their joint bills of $3,000 would be split so that the higher earning partner pays $2,000 to the other's $1,000.

Individual expenses can still be kept separate and paid for from individual accounts.

A variation of this for people who wish to maintain account separation is for the lower-earning spouse to handle specific bills (such as the cars and the utilities), while the partner handles the larger ones (like the mortgage, daycare, etc.).

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However you decide to split the bills, the person who makes less needs to feel his or her financial contributions are important, says Farnoosh Torabi, author of "When She Makes More: 10 Rules for Breadwinning Women."

She elaborates:

"Perhaps that person making less can put 20 percent of their income toward family vacations or retirement. When the family has something fun to enjoy, they can look back and say, 'Dad or Mom paid for that,' and it can be perceived a huge contribution to the family."

  • A shared account, but one income icon

    A shared account, but one income

How it works:

One breadwinner makes all or a significantly higher income, and pays for all expenses.

Try it if:

One person is a stay-at-home spouse/parent.

Get it going:

  • Talk it out. Have an honest discussion to make sure both parties are comfortable with the arrangement. For instance, if the earner is willing to take on the financial burden (while the other spouse stays home to run the household, parent, or goes back to school, perhaps), there should be no guilt or resentment on either side.
  • Discuss if this is a temporary situation. Perhaps you'll agree that the non-working spouse will pick up the financial slack once the kids go off to school, or they finish their graduate degree, etc. Or, you may decide that the at-home partner's contributions are just as valuable as an income (such as if he or she is raising the children, and saving the family from daycare costs).
  • Consider keeping both spouses' names on the bank account. In such cases, the stay-at-home spouse often handles the budgeting and the banking. In fact, in these arrangements, it's wise for the non-working spouse to maintain good credit health and perhaps a bank account in his/her name, just in case. You don't want a situation in which a breakup or some other tragedy would leave one partner with no access to money or credit.

"If you become divorced or widowed, an individual credit history will enable you to get a loan and open utility accounts without leaving a deposit, and may even help you land a job (some employers check applicants' credit during the hiring process)," says personal finance expert Suze Orman.

  • Partners icon

    Partners all the way

How it works:

Couples completely combine their finances, doing away with individual accounts.

One study from Cornell University revealed that couples who pool their money report a higher level of happiness in their relationship than those who don't.

Try it if:

You're not coming into the marriage with significant assets or debts, and want to start fresh together.

Get it going:

  • Head to the bank (or go online) to:
  • - a) Open a joint checking account in which you deposit both of your incomes and pay all of your bills
  • - b) Open a joint savings account (or more than one) so you can merge monies and save toward common goals (i.e. an emergency fund, family vacation, etc.)
  • Don't forget to also allocate a "fun budget" (as mentioned previously) to give each person a bit of freedom. You can either set a withdrawal amount for each spouse to do with as they wish, or transfer that set amount into individual checking accounts that you've maintained.
  • You pay, I save icon

    You pay, I save

How it works:

The couple lives on one income (whomever's is consistent, and can cover the expenses), and banks the other spouse's income as savings.

Try it if:

One partner has a fluctuating income, or if you have some major financial goals you wish to tackle.

"Living on one person's income and saving the entirety of the other is one of the most effective ways to ramp up your savings and live a more financially free life," says Paula Pant, personal finance expert and blogger

Get it going:

  • Deposit one spouse's income into a checking account to handle bills, debt payments, and shopping.
  • The other spouse's income will go into a savings account that can be earmarked for emergencies, or special purchases.

Regardless of which route you take, consider these words of couples-and-money wisdom from the all-knowing Orman:

"Who makes what is irrelevant. The size of your paycheck does not determine your role in the family finances. Respect each other as equal partners, with an equal say in money management."

It bears repeating that there's no right or wrong way to merge finances. So don't feel like you need to follow your dad's advice, or what works for Jane and Bob down the street.

Discovering an approach that works for your marriage takes constant communication, careful calculations, and some trial-and-error experimentation.

If you have complex finances, it might be a good idea to work with a financial planner or tax accountant to get some objective advice.

Some complications might be if one of you is getting an inheritance, or if either of you had previous marriages and has to pay spousal/child support.

Or, if either of you has significant assets, it might make sense to consider a prenuptial agreement.

In addition, you're not married forever to the method you choose.

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As a newlywed, you should be heavily invested in the idea of two becoming one, otherwise, you'd still be on Tinder, right?

Tackling your finances as a team will not only help you master money matters, but it will help strengthen your relationship and achieve your shared dreams together.

Just as you're learning to accept and love each other's little quirks and habits (as long as he keeps the toilet seat down!), compromising about money will pay huge dividends toward enriching your financial longevity, and in turn, your love lives.

A happy ending

A happy ending

I've always been the breadwinner - I always plan to be.

I put my wife through undergrad and law school.

Even though I remain the breadwinner, I'd do it again.

Not a day goes by that I don't credit my wife for helping me build my career and raise our family.

We know that there are plenty of different ways to manage money as a new couple, but one thing feels certain:

However you manage your money together, treat each other respectfully, be honest, and recognize that there are contributions beyond how big of a paycheck either of you brings home.

So, the next time you're fuming over her shoe addiction (I probably spend way too much on multiple computer screens) or his penny-pinching ways, take a breather and remember that your love is bigger than the credit card bill.

By getting intimate with each other's best assets and financial flaws, and accepting your partner's money mindset, you can evolve from naive newlyweds into a financially attractive power couple.


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