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How to combine finances with your spouse

Learn the pros and cons of merging finances with your spouse, from budgeting together to sharing a joint bank account.

In many ways, marriage is a “new beginning” for couples. With that level of commitment comes additional responsibilities and decisions to be made. From a financial standpoint, one of the biggest decisions to make is if you and your spouse will combine finances and if so, how to do it.

You may have been combining your finances to a certain extent before marriage, such as rotating who pays for what joint expense, keeping a shared budget, or even just regularly updating your partner with where you’re at financially. While banks do not require couples to be married in order to open a joint bank account, many couples do wait to actually tie the knot before taking that next step.

Whether you and your partner are engaged, newlyweds, or a few years into your marriage, read on for a few tips on how to approach combining your finances within a joint bank account:

Decide if it’s right for you.

Ideally, you and your partner should discuss whether or not to open a joint account before your wedding date, as it can help you learn some key information about each other’s financial habits and views. Opening a joint account with your spouse means being fully transparent about your spending and saving habits. Have an honest discussion in order to determine if combining your finances in a joint account would ultimately be helpful in your financial future together.

Be upfront about your financial picture.

Your financial habits and views include much more than just your spending and savings habits. While these topics are crucial to discuss with your partner, be sure to also review in depth each other’s financial picture in full, including regular income, credit history, any outstanding forms of debt and anything else that you should know about each other. These may seem like obvious topics to discuss with your partner, yet far too many couples neglect to open up about the full extent of their financial picture, leading to unpleasant surprises or miscommunications down the road. This is also a great time to discuss how the two of you will go about paying off debt—whether you want to stick with the “what’s mine is yours” approach or keep it separate.

Determine how to contribute.

Many couples with a joint bank account also retain their own personal accounts. If you decide to go this route, determine with your partner how much each of you will regularly contribute to the joint account. Depositing all of your regular income into the joint account first is a good idea to keep everything transparent and fair. Once you pay all regular expenses (mortgage/rent, car, utilities, groceries, etc.), you could choose to transfer agreed-upon amounts into your each of your individual accounts for money to spend at your own discretion. Determining this ahead of time can reduce confusion and any feelings of uneasiness over who is paying for what.

Create a budget together.

Once you decide on how you’ll both contribute to your joint account, create a budget (if you have not already done so) to monitor what’s coming in and out of your account. If you and your partner are not used to paying for things together, a budget is a great way to organize your expenses, determine if your spending habits need any modifications, and be mindful of how your money is being spent. You can also take this opportunity to discuss long-term goals with your partner, such as saving for a down payment on a home, paying off student loans, saving for retirement, etc., and weaving how you’ll work towards achieving those goals into your budget. Review your budget and bank statements on a regular basis to identify and resolve any issues that arise quickly.

There are many pros and cons to opening a joint bank account and combining finances with your spouse, which vary from couple to couple. Ultimately, it is up to the two of you to decide what will work best for your relationship and financial future together. Your financial advisor can provide an objective perspective on helping you decide how to merge your finances as a married couple.

Interested in discussing this topic further with a financial advisor? With offices in 23 states, there is likely a North Star financial advisor near you. Contact an advisor here.

2069018 / DOFU 03-2018