How to Merge Your Finances with Your Partner

December 24, 2020

When you get married, you share everything with your partner. Your home … children … responsibilities … the rest of your lives! However, something that many couples have begun to question sharing is their finances. As many as 24% of couples don’t share their major accounts such as their savings, checking, credit cards, or even mortgages.

And for good reason: Combining your finances can be scary. However, sharing your finances doesn't have to be a daunting task. In fact, there can be a lot of benefits to merging your accounts and having an open dialogue about your money. These aren’t just financial advantages, but also collaborations that bring you closer together as a couple. 

Here are all the pros and cons of combining your finances with your partner and how to navigate important life decisions as a couple to improve both of your financial futures.

Combining Finances Before Marriage

If you’re not married yet but have been dating for a long time or even living with one another, then there could be a lot of reasons why you may or may not want to share financial accounts with your partner. Here are some of the most common pros and cons of combining your finances.

Why You Should Merge Finances Before Marriage

  • Simplicity – Let’s start by stating the obvious: Combining your money into one pot just makes everything easier! No longer would you have to discuss or even argue about who’s going to pay which bills and what one person owes the other. You can just write checks and pay bills all from one account that both of you have access to.
  • Teamwork – When you combine your finances, it forces you to work together as a team. You can’t silo your responsibilities or ignore problems when they come up. You have to communicate with one another and manage your money as a unified partnership.
  • Stay organized – Working from the same account can be extremely helpful when it comes to staying on top of your bills and keeping track of your budget. It will also make it easier to plan for long-term goals like a down payment for a house or retirement since you’ll know exactly how much each person can contribute.
  • Transparency – When you’ve merged your accounts, there’s nothing to hide from one another. This can help mitigate any feelings of tension or doubt that one person or the other may have.
  • Stifle bad spending habits – When you can see how the other person spends their money, it opens up the opportunity for improvements. As part of your open dialogue, the two of you can talk about how certain spending habits may be destructive and what you can do together as a team to help the situation. 

Reasons Not to Combine Finances Before Marriage

  • Lack of trust – Every couple has challenges they need to work through. If you’ve got some unresolved issues, then perhaps now is not the time to combine your finances just yet. Work through your differences first before bringing money into the picture.
  • Different money styles – Some people are natural savers while others are spenders. Unless you can respect these tendencies, it could lead to a lot of unnecessary bickering and arguments. Again, use the time leading up to marriage to discuss each other’s relationship with money so that you’re properly prepared to work together.
  • Past financial mistakes – Unfortunately, problems with money like a poor credit score or bankruptcy can follow you around for years. If one person in the relationship has a relatively clean credit history, it may be best to leave their finances solo and use this to your advantage when trying to qualify for future credit or loans.

Combining Finances After Marriage

The natural expectation after you get married for most people is that your money will be shared as one. Here are some reasons why that may or may not work for some couples.

Why You Should Merge Finances After Marriage

  • Greater security – No one can predict when you’re going to be faced with a major financial disruption like the loss of a job or medical emergency. By having combined finances, you have less to worry about because you know that your spouse is going to be there to support you financially.
  • Simplicity – Again, managing your money and developing a realistic budget is just so much easier if everything is coming from the same pot of money. Plus, as a married couple, it will help prevent a lot of unnecessary challenges that come with establishing things like applying for a mortgage, life insurance, starting college savings accounts for children.
  • More flexibility – Without having to go back and forth about who’s paying for what and where the money will come from, you’ll have access to things that might have previously been out of your reach. This could be things like qualifying for a credit card, vehicle loan, or new mortgage.
  • Creates unity – Working as a team to determine your true financial needs and where you both want to be is something that can bring you closer together. Use this as an opportunity to strengthen your bond as well as prepare for the future.
  • Simpler taxes – Filing jointly as a couple with one set of accounts dramatically simplifies the process of doing your taxes.

Reasons Not to Combine Finances After Marriage

  • Making debt a bigger issue – Remember any debts you take on after you’ve married and combined finances will be the responsibility of you both. If you run into problems, this can harm both of your FICO scores, which would then jeopardize your chances of qualifying for future credit or even a mortgage. If one person has a significantly better credit score than the other, it may be wise to leave your finances alone. 
  • Can feel constraining – Sometimes in a marriage, the constant sharing of everything can leave you feeling like you have less of your own identity. This can be especially true if one partner tends to be more domineering than the other. If you’d like to maintain some sense of independence, then leaving your finances separate might help to compensate for this.
  • Can cause arguments – Let’s be honest: Money is one of the leading causes of divorces. If you’d like to avoid petty arguments or the feeling like you constantly need permission from the other person, then leaving your accounts separate might be the better way to go.

How to Combine Finances With Your Partner

If you’ve decided that you want to combine your finances as a couple, married or otherwise, here are a few simple steps to get started:

  1. Organize your accounts – Determine which types of financial accounts (bank, investment, retirement, etc.) you each have and how much money they contain. Make a list of each one detailing the name of the intuition, account number, value, and its purpose.
  2. Decide which accounts to merge – The purpose of combining your finances is to consolidate your accounts and make things simpler for the two of you. From your list, determine which accounts should be kept (or shared), and which ones can be eliminated. A prime example would be adding your spouse to an insurance policy to receive a discount.
  3. Open joint checking and savings accounts – As a married couple, there may be some psychological advantages to entering into new accounts at the same time. This will eliminate feelings of prior ownership and mentally help each of you associate these accounts as belonging to both of you. Close down your previous individual accounts and use your combined assets to fund these new ones.
  4. Get a shared credit card – Research which type of credit card would work best for you both and apply for a joint account. This allows both of you to use the credit account and see each of the transactions.
  5. Evaluate investment accounts – Discuss whether your former taxable investments are performing as well as you’d like. Would you be better off moving them into a new, shared account with a different service provider?
  6. Evaluate retirement accounts – Do either of you have any old 401k plans or IRAs that haven’t been touched in years? Now would also be a good time to have these rolled over into your new, preferred financial provider so that you can manage everything from one dashboard.
  7. Evaluate loyalty program accounts – Do you have unused frequent flyer miles, hotel points, or other credit card rewards that either you’ve earned over the years? Don’t let them go to waste. Determine how you can strategically use these to do something fun or constructive together.
  8. Tackle each other's debt – As a unified team, debt can sabotage you both. Figure out how much of your budget can be put towards eliminating your existing debts. Try strategies like the debt snowball or debt avalanche to accelerate your payoff as much as possible.
  9. Decide how to split responsibilities – Discuss which roles each of you feels more comfortable handling certain aspects of your finances. These could be activities like paying bills or managing your long-term investment goals. Come to this decision mutually and give the other person the autonomy they need to manage this function.
  10. Establish regular check-ins – Managing your finances isn’t something you do just once. It’s a dynamic process that should be reviewed regularly. Establish regular check-ins with each other and keep an open and honest dialogue about money. This will not only help to build trust, but also strengthen your partnership.

How to Share Your Financial Information

One of the best ways to get couples on the same page about their finances is to make sure they both have unrestricted and transparent access to their accounts. This goes beyond checking your savings account balance. It means being able to pull up the latest credit card, investment, insurance info, and retirement statements any time you wish.

If you’d like to collect and organize all of these documents into one convenient place, then try using an app like Pillar. Pillar lets you store all of these files (and more) into a secure, encrypted location that only you and your spouse will have access to. Try Pillar for free for 14 days with absolutely no obligations.

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