Jun 20, 2024

Relationships

How to Combine Finances After Marriage: A Comprehensive Guide

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

Combining finances after marriage is a significant step for any couple. Whether you're newlyweds or have been together for a while, merging your financial lives can enhance your relationship and financial stability. In this blog post, we'll explore the best ways to combine finances when married, including practical advice and strategies tailored for today's dual-income couples.

The Three Approaches to Merging Finances

Couples typically choose one of three methods to manage their finances together:

  1. Fully Joint Finances (What’s Mine is Yours)

  • Pros: Simplifies managing savings and expenses; fewer accounts to manage.

  • Cons: Partner’s financial decisions directly impact your stability; less personal financial security.

  • Ideal For: Couples married younger or those who evolve to this after major life events like buying a house or having children.

  1. Partially Joint Finances (Yours / Mine / Ours)

  • Pros: Maintains financial independence while allowing for shared goals and expenses; encourages active financial management and literacy.

  • Cons: Requires careful planning for shared vs. individual expenses; more accounts to manage.

  • Ideal For: Newlyweds or couples with established careers.

  1. Fully Separate Finances (What’s Yours is Yours)

  • Pros: Complete financial independence; partner’s financial decisions have less impact on you.

  • Cons: May hinder learning to manage finances together; potential missed financial benefits.

  • Ideal For: Younger couples, previously divorced individuals, or those with significant assets or established careers.

Key Questions to Discuss

To figure out the best approach for your relationship, consider these questions:

- Do you feel more secure with an account under your own name?

- Do you trust your partner’s financial decisions?

- Is personal spending freedom important to you?

- How crucial is a personal financial safety net?

- How much do you value financial transparency?

- Are most of your expenses shared or separate?

Conversations About Shared vs. Private Finances

Deciding what to share and what to keep private is crucial. Here are some pointers:

  • Visibility: Determine which accounts are visible to both partners.

  • Joint Accounts: Decide which accounts will be jointly owned.

  • Private Accounts: Establish guidelines for private spending and saving, including check-ins for significant purchases.

Managing Joint vs. Individual Accounts

Understanding the pros and cons of joint accounts can help ease the transition:

  • Starting Small: Open a joint account for shared expenses like rent.

  • Saving Together: Use individual accounts to save for shared goals.

  • Expanding Joint Accounts: Gradually increase the use of joint accounts for bigger financial goals, such as saving for a house or children.

Next Steps

In our next post, we’ll delve deeper into:

- Combining finances before marriage

- Combining finances after marriage 

- Combining finances after major life events like buying a house or having a child

- Strategies for couples who don’t plan to get married

Conclusion

Combining finances after marriage involves thoughtful discussion and planning. By exploring the three main approaches and addressing key questions, couples can find a strategy that works for their unique situation. Remember, the goal is to ensure both partners feel secure and comfortable with their financial arrangement. With open communication and flexibility, you can navigate this important aspect of your relationship successfully.

For more detailed guidance and personalized advice, stay tuned for our upcoming posts.

AUTHOR

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

Emily is the ceo and cofounder of Plenty. Started by a husband and wife team, Plenty is a wealth platform built for modern couples to invest and plan towards their future, together. Previously, she was VP of Strategy and Operations at Even (acquired by Walmart/One) and a founding team member of Stripe's Growth and Finance & Strategy teams. She began her career as a VC, and was one of the youngest nationally to complete her CPA, CA and CFA designations.

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