To Combine Or Not To Combine Your Finances When You Get Married, That Is The Question

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My wife and I got married in June 2018.

It was an extremely exciting moment to officially tie the knot. We had dated for just over three years before we said “I do”, and leading up to that it was a rollercoaster. We met on Tinder, became serious pretty quickly, and then I moved from Los Angeles to Salt Lake City to avoid doing the long distance thing.

Prior to becoming legally married, we made sure to have several conversations around the subject of finances. Given that financial issues are one of the biggest reasons people get divorced I knew it was absolutely necessary to discuss money before taking the marriage plunge.

Before saying “I do” we laid everything out on the table in terms of our finances, debts, and assets so we could discuss them together.

My wife, to put it bluntly, is a poor college student. She has no real assets other than a $5,000 car and a few thousand dollars in the bank. On the bright side, thankfully, she isn’t accruing college debt.

I, on the other hand, was going to enter the marriage with $72,000 in student debt, some credit card debt on a 0% interest card, and a car payment.

I did some financial projections and I predicted that I would only have my car payment and student loans remaining at the end of 2018. Based on that, we mutually agreed to stay financially separate until I handled my credit card debt.

Between that conversation in April 2018 and now, I wrecked my car, I paid off my credit card debt, and I got a new job with higher pay. She also got a higher paying job, we built a healthy savings account, and we decided to combine our finances. Now all we have left to tackle is my student loans, and we are crushing those at a great rate.

While that decision to combine our finances felt right for us, some couples swear by keeping their finances separate long term, and there is nothing wrong with that if it works for both of you.

Here are some pros and cons to combining your finances that I’ve learned on my journey.

What are the pros of combining finances?

One obvious pro is ease of access to cash. More money in one place creates a simpler pot to draw from. Next is transparency. With trust being a key tenet in a successful relationship, trusting someone else with your money is a large step. When done correctly, it can be incredibly rewarding and fulfilling. Another pro is joint credit. If you and your spouse are looking to make a large purchase, you can begin to grow your credit together. If one person comes into a marriage with less than perfect credit, the other person may be able to pick up the slack. And lastly, the large plus of combining finances is tax credits. Filing a joint tax return can be extremely beneficial, especially if one person makes a larger amount than the other. Lastly, there are discounts and bonuses you can be eligible for with larger “pots” of money involved.

Lastly, the largest pro from my perspective is the ability to grow something together. It was a major shift for my wife and I to make to go from “my money” to “our money”.

What about the cons of combining finances?

A large con of combining finances is the potential for taking on large debts. In my case, my wife unfortunately took on my $70,000 in student debt with me, bless her heart.

While this is really the only tangible con, for some couples issues arise from combining. For instance, combining finances means that there is little to no room for privacy, as all expenses will eventually come to light. That lack of autonomy can be easy for some and devastating for others.

Another thing to keep in mind is that adding your spouse to your various financial accounts isn’t always so easy. When my wife and I went to our bank to finally combine our checking accounts, it took roughly 20 minutes of paperwork. Not the end of the world, but there are a decent amount of small instances where you will need to put in some effort.

On a much lighter note, gift giving and wagering bets is just not as fun. My wife and I each have one private credit card solely for the purpose of gift giving to get around this.

To Combine Or Not To Combine: How To Make The Decision

Assess Your Financial Personalities 

Just like religion, everyone has different beliefs when it comes to money. More times than not, there tends to be one saver and one spender in each relationship. That can cause some issues right away.

If someone is wanting to try to go “FIRE” and one person can’t hold $50 in their wallet for more than five minutes, that can be a large issue. If this is the case, it is best to address those issues immediately and find common ground. Tying the knot is a special occasion, but can easily turn sour. Financial infidelity is a rising problem in the US, and is a recipe for disaster.

Thankfully for my wife and I, we are both savers. We don’t go to the mall on weekends or buy frivolous items. We do have weekly date nights and do enjoy the foodie lifestyle, so we do have a decent budget towards eating out, but that is our largest consistent spending category. Given that we do have similar financial personalities made us feel that much more confident in combining.

Look At Your Pre-Wedding Debts and Assets

Like my wife and I, every couple should have a breakout session before the wedding detailing their financial situation. Does someone have student debt? Major credit card debt? A potential incoming trust fund? A large collection worth thousands of dollars?

This conversation will allow for trust building and the ability to create a long term financial plan.

However, if you are leaning towards separate finances because of different belief systems, consider consulting with a lawyer to ensure legal protections are in place in case of divorce or another life altering event.

Take A Look At Your Financial Goals Together

Does one person want to have a large house in the Hamptons with a large mortgage and the other wants to buy a smaller property in cash?

Does one person want to have a large college savings for future children while another person doesn’t want kids at all?

Again, a conversation needs to be had. My wife and I have a large savings built already from wedding presents and our own deposits. Our long term goals is to eventually buy a house and have kids, but that will not be happening for a while. Having that conversation though was key in allowing us to feel confident to merge our finances.

Compare Your Feelings About Autonomy And Money

Some people are extremely protective of their money and aren’t fans of sharing it. In this case, separate finances might make the most sense.

For example, my mother-in-law and father-in-law have a very “parent-child” type relationship when it comes to their finances. He is very protective of their money and she is given a monthly allowance to keep her spending in check. In their case, separate finances work.

However, if you and your spouse are of the teamwork mindset and willing to work together to build wealth and financial freedom, combining finances may be the solution for you.

I currently make roughly 70% of our total home income, but my wife is helping me with my student loans. If I want to go get a massage or she wants to get dinner with her girlfriends, we don’t hassle each other–so for us combining our finances hasn’t cut into our autonomy. Other couples though are different, and that’s OK. Find what works.

Final Thoughts

I cannot express how important it is to have transparency and an open conversation about finances before tying the knot. My wife and I have already seen the benefits of our open conversations. We combine to make about $95,000 a year right now living in Salt Lake City, and have $68,000 in student debt left to tackle. Anyone can have financial success in marriage with the right foundation, open conversations, and an alignment goals.

Brett Holzhauer is a graduate of the Walter Cronkite School of Journalism and Mass Communications at Arizona State University. He enjoy writing about personal finance, travel, and credit card rewards. In his spare time, he enjoys traveling with his wife, eating questionable Mexican food, and watching college football.

Feature Illustration: Laura Caseley For The Money Manual