Should You Combine Finances After Marriage?

Combining your finances as a couple — especially after you get married — comes with pros and cons. Whether you decide to keep your money his and hersor make all finances oursdepends on a variety of factors. Your income, debt and credit situations, individual and joint goals and your own habits can all be reasons you decide to combine finances—or not.

Decades ago, it might have been the traditional choice to combine money matters. But couples today are creating their own financial paths, with no one way being the right way. According to a survey from Policygenius:

Around 20% of people keep all their money management separate from their partners’
30% of couples say they don’t know the details of their partners earnings
Around three quarters of couples share all their financial accounts, not even holding a single credit card or checking account separate

Should you combine finances when you get married today?

Many couples do benefit from combining finances when they get married. It can make money simpler to manage and help couples work as a team toward long-term goals. However, this is a personal decision, and there are also reasons you may not want to do so, such as one person has a poor credit history.

Should married couples share money?

Though laws differ in each state, it’s generally true that after you get married, you legally share assets and income you earn. How you share those things is up to you, but managing your finances in an equitable and fair fashion you both agree on tends to support a longer-lasting relationship.

What Are the Benefits of Combining Finances?

If you wonder if you should combine finances after marriage, consider some of these benefits of doing so.

Teamwork and Shared Goals

When you combine finances, you streamline any efforts to work together as a team toward money goals. You can ensure you’re on the same page, work together instead of accidentally against each other and make intelligent decisions about your short and long-term goals as a couple.

Some areas where this level of teamwork can benefit you include:

Paying down debt. By looking at the big picture and understanding all the debt you both owe, you can make the most efficient plan to pay it down. That could include refinancing debt under a single loan or prioritizing certain balances to reduce the interest you, as a couple, pay overall.
Saving for short-term purchases. Whether you’re putting money away for the holidays, a vacation or a fun purchase such as a motorcycle, you can get to your goal faster if you work together. And agreeing ahead of time to buy things that benefit you both helps reduce the risks that one person may become upset or bitter about money matters in the future.
Buying a home.Cooperation can be even more important if you’re planning to buy a home together. If you’re applying for the mortgage together, both of your incomes and debt and credit histories are applicable. It’s helpful to go into this process without surprising each other with these types of details. Second, you may need to address issues such as credit utilization or errors on your credit report before you’re approved for a mortgage. This can be a tedious process when you have one set of accounts. Two sets of accounts can be double the headache.
Saving for retirement.Most couples tie the knot intending to hang in for the long haul, and that means retiring together. Combining your finances lets you make and work toward a plan that is more likely to provide sufficient support for both of you in the future.

Keeping Things Simple

From survivorship to budgeting, combining your finances reduces the work it takes to manage your finances. Combined money typically means less accounts to keep track of, reducing the risks of potential errors and the costs associated with them. When you’re both managing separate accounts, you have double the risk of costly overdrafts, for example. You may also find yourself moving money around a lot to cover all the bases, which also opens the door for mistakes.

Budgeting is also easier when you’re looking at a single, combined stream of income. Otherwise, you have to decide who pays what or what portion and how leftover money should be split.

In most cases, survivorship is also easier when both your names are on accounts. If something happens to one of you, the other person has immediate access to accounts and funds. That’s true even before wills are read and estate matters are handled.

Transparency

When you share everything, you’re both in on the good and bad details about your financial situation. That encourages you to be honest with each other, work together toward resolutions and avoid unpleasant personal accounting surprises.

And that transparency apparently has a positive impact on your overall relationship. According to the PolicyGenius study, 1 in 5 couples who don’t combine their finances split up over how one or both individuals handle money. That figure is much lower among couples who docombine their finances: only 4% cited money management as a reason for leaving their partner.

What Are the Drawbacks of Combining Finances?

But it’s not all good news when it comes to pulling your money. This process doesn’t work for every couple. Here are some disadvantages of combining your finances.

Unequally Yoked

It’s common advice for couples to consider whether they’re equal in the most important aspects of their lives. For many people, finances is one of those areas.

If one spouse comes into the marriage with little to no money, combining funds can easily cause contention. The same is true if one of the spouses has a lot more debt than the other or a poorer credit score. Issues on your partners accounts can lower your overall credit score if you put your name on those accounts.

Feeling Constrained by New Rules

If you’ve managed your own money for some time, it’s easy to feel constrained by the rules that naturally come with sharing resources. You have to begin informing another person when you make purchases or talk to them about buying things before you take action. This can be frustrating for couples, especially at first.

So, How Do You Combine Money After Marriage?

You likely already have money and accounts before you tie the knot, and you can take different paths to combining your accounts. Couples can add each other to existing accounts as authorized users. They can also open new joint accounts and close existing individual accounts. However, it’s important to remember that the age of your credit accounts does impact your credit rating. Couples may decide to leave some older accounts open for this reason.

How Do Married People Deal With Finances?

Modern married couples deal with finances in very unique, personal ways. You can choose to combine your accounts, keep them all separate or take a hybrid approach. No matter which you choose, however, it’s critical to understand both of your credit situations and what role you each play in the long-term financial future of your marriage.

Plan Ahead Before You Combine Your Money

Some of the issues related to combining finances can be reduced or avoided by planning ahead. Before you get married, talk about how you want to handle your money. If you want to make it a joint effort, take some time to lay all your details out for the other person.

Work together to create a plan of action that includes paying off debt and fixing any credit problems either person might have. By starting with the cleanest slate possible as a couple, you lay a stronger foundation for supporting future success. Consider taking actions such as paying off student loan debt or getting out of debt together even before you get married.

Sign up at Credit.com to get your free credit check so you — and your partner — know the score. That ensures you’re prepared to work on a plan together.

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