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Should You Merge Finances With Your Spouse?

by Contributor

Financial management is one of the most serious considerations that married couples have to plan for. Without proper planning, financial stress can put a significant strain on a marriage. Money is such a hot button issue that a 2004 study issued by Redbook magazine found that 70% of married couples talk about money every week. Clearly, this is a sign that couples aren’t taking the necessary steps to determine what financial arrangement works best for them.

This need not be your story. Money management is no different than the myriad of other considerations you have had to make in order to protect the marriage. Once you come to an agreement that works best for you and your spouse, you need not argue about it or endure lengthy discussions of it any more. Today we will examine whether it makes sense for you to merge finances with your spouse, or the two of you would do better to keep your money separate.

Should You Merge Finances With Your Spouse?

Trends In Marriage Finance

Before exploring the risks and benefits of combining your bank account with your spouse, let’s examine how America’s couples are currently behaving with their money. In 2004, Smart Money magazine conducted a survey on money within marriages and found that the majority (64%) of couples decide to merge finances. While this number seems surprisingly high, keep in mind that the survey did not make any mention of length of marriages surveyed.

Couples who have been married for a long time might have children, a mortgage (or perhaps two) car loans, and regular bills coming in. As compared to newly weds who are still going out with friends and lack some of the financial burdens that come later in life, long-term spouses might find it simply makes life easier to combine bank accounts and finance the marriage jointly.

As for the couples who didn’t merge their money, 14% reported keeping their bank accounts completely separate. The remaining 18% set up a joint account that they both contribute money to, but also kept private personal accounts on the side. None of these choices can be said to be “the right way” for everyone, as Ginita Wall, co-founder of the Women’s Institute for Financial Education points out. “Married couples should try different ways of handling the money to see what works for them.”

Your Views On Money

Too often when couples talk about money, they focus almost entirely on the practical benefits of combined finances without discussing their individual beliefs and goals for their money. Before deciding to merge finances or stick to separate financial lives, it is important to sit down with your spouse and discuss your views on money in order to decide if it even makes good sense to combine your bank accounts. Following is a brief list of topics you should touch upon with your spouse to learn how closely your individual financial goals align:

  • Do you two see eye to eye on the importance of savings?
  • Do you have similar savings goals? (Think new cars, a boat, home renovations, a pool, etc.)
  • When would you each like to retire?
  • How much do you want to save for your children’s education?
  • Do you even want to have children?
  • What pleasure items (travel, clothing, concerts, etc) do you need to spend money on to be happy?
  • Where do you want to live in the future?
  • Are either of you passionate about investing?

If you see eye to eye on more items than not, merging finances will allow you both to accomplish your goals much faster than you could alone. If instead you differ considerably on what you each plan to do with your money, it will only cause tension and arguments to combine your money. Imagine if you are a stern money saver with dreams of early retirement and your spouse is an avid spender with a penchant for designer clothing. Pooling your incomes will only cause constant bickering, as each of you will be striving to accomplish wholly different goals with the same money.

Combined Finances Allow For Financial Transparency

Financial transparency means that both spouses know exactly how much money they have between them, what they can afford, and how close to reaching their goals they both are. Trent Hamm, a writer for popular financial blog The Simple Dollar, reports that this is one of the major benefits to merging finances. “When my wife and I were first married… we basically left all of our accounts the same, keeping accounts and direct deposits at separate banks,” he recalls. “…It had serious disadvantages, chief among them the fact that it was hard for either one of us to really get a grip on what our true financial situation was.”

Indeed, keeping your finances hidden from view, squirreled away in separate accounts can cause problems within a marriage. You may both talk about owning a beach condo one day, but unless you can look into an account and see exactly how close you are to reaching making a down payment, it can begin to feel more like pure talk than an attainable goal. Emergencies can be made more stressful without transparency. As an example, a sudden hospital trip is always a living hell, but it is made unduly more hellacious if the spouse in the waiting room has no idea if they can afford the necessary medical care.

Combined Finances Encourage Teamwork

Marriages are all about working together toward common goals, and survive largely by the cooperation and compromise of both spouses for those goals. Merging finances bolsters this sentiment and provides a framework for the two spouses to progress as a unit. If one spouse makes three time as much yearly income as the other, there can be no competition, no bragging or arguing about contributions. This means that you need to get comfortable with the idea that “my money” is now “our money,” and ditch all of your hangs up around this concept before you even consider merging finances.

Once you have established your common goals, the money you each individually earn is seen as propelling you both toward your dreams rather than worrying about how much of the account is technically whose money. In order for this arrangement to be successful, you must both consult each other before making big expensive purchases. Holdings ideas like, “I just put $5,000 into the account, so if I want to spend $2,000 of it on season tickets to Yankee Stadium, I should be allowed to do so without argument,” will only serve to poison the marriage, as you should both view your partnership as superior to your individual financial desires.

Alternatives To Combined Finances

As was mentioned in the Smart Money study discussed above, not all couples decide to merge finances and there are benefits to alternative arrangements. If you both sat down, discussed your views on money, and walked away from the table feeling like you both have wildly different goals for your finances, that is okay. Being that you do share a home together, you could either split bills (such that she pays utilities and you pay the mortgage, or some similar set up) or establish a joint account that you both contribute money to for bills and common expenses. Aside from this “bills” account, you would continue to maintain your personal accounts as you please.

You may instead find that while many of your financial goals differ, you do share some similar dreams that you want to work toward together. For example, while you might be an avid motorcyclist who spends a lot of money on your hobby, and while she might be a diving enthusiast who spends most of her money on that hobby, you might agree that you both want to live in Italy by retirement time. In this scenario, maintaining personal accounts on the side for your individual hobbies and goals makes sense, but establishing a joint account for your Italy retirement will help you both feel like you are moving closer to that goal as a team, rather than completely fending for yourselves.

About the Author: Joshua Fletcher is a freelance writer for MarriageMax.com. Marriage Fitness is an innovative step-by-step relationship-changing system that teaches you how to save your marriage. It is a more effective alternative to marriage counseling. They offer free marriage therapy to couples going through marriage problems.


Published or updated October 6, 2010.
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{ 6 comments… read them below or add one }

1 shedwa

I think your assuming that “Money is such a hot button issue that a 2004 study issued by Redbook magazine found that 70% of married couples talk about money every week. Clearly, this is a sign that couples aren’t taking the necessary steps to determine what financial arrangement works best for them.” is probably true, but that statistic doesn’t mean that the weekly financial talking is arguments. I talk with my spouse weekly about finances, but it’s when we are reviewing our budget together. It’s a very positive talk, and discussing finances that often is a great thing for us.

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2 Briana @ GBR

I was a little reluctant to merge finances with my significant other. We have a combined checking/savings but really only use it for household expenses. As I’m tackling my debt, I noticed he wanted to help me but I felt like it’s my debt and I should be the one to pay it off. If you plan on spending the rest of your life with someone, I honestly don’t see how you can avoid merging finances in one way or another.

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3 Blue Spyder

For some reason the talk of finances scared my ex off. She was horrible with money, so when I said no to merging accounts she split, but I guess that’s how it goes. If both partners aren’t on the same page, a joint account can turn 1 bum into 2 bums.

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4 Andrew

I think the key here is that you need to have discussed all your finances ahead of time and exactly how you plan to share your merged finances. Guidelines need to be set (perhaps even some things put in writing) to make sure everyone is on the same page.

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5 Evan

Pretty much every choice you make in life can be analyzed through a financial lens. Where and how you live, what you do, who you do it with, how often, etc., almost everything costs money.
You can argue that lots of things are free (the best things in life?), like walking in a park. Great, how close are you going to live to the park? Are you going to drive? Take a bus? Pay for a higher mortgage to live within walking distance?
With separate finances it’s just so hard to be on the same page with every choice you make.
For me, merging everything has forced us to communicate better and more productively and made sure our goals are joint goals that we’re both striving for.

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6 Dwight

You’re totally right, couples do need to see eye to eye on finances before making the jump to join accounts.

Dwight Anthony
Financially Elite Blog dot com

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