How to Blend Your Finances After Marriage
You’ve said, “I do,” you’ve blended your families, and you’ve accepted dealing with each other forever, no matter what. Now it’s time to put those vows to the test and live your lives together as a unit. Blending your belongings, your emotions, and your finances can seem daunting, but after it’s all said and done, it’s a lot nicer to have everything combined.
When you’re blending your finances, things can seem confusing. You’ll have to decide if you’re going to share bank accounts, how to split payments if you’re not already, who should be managing the money, or how to split the task if you both want to. You’ll learn how to budget for a dual income, make appropriate changes to your financial paperwork, plan for long-term spending, and be aware of the role finances can play in marital strain.
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Creating a Dual Budget
Once you’re settled in the married life, take a night to dig through your finances together. Find out what you make, what your spouse makes, what you owe, and what your spouse owes. Lay out your bills and discover the broad view of your finances as a unit. Creating a dual budget is really similar to creating your own personal budget, but you’re applying both incomes, bills, savings, and debt. In creating your dual budget, you can get a better idea of your monthly expenses, your ability to invest in bigger purchases, and how to tackle long-term financial planning. Not only should you talk about the concrete numbers like salary, bills, and debt, you should also discuss your financial lifestyle.
If you always spend your extra money on eating out, if you have an issue with overspending, or if you like treating yourself to an expense every month, those are also important discussions to have with your partner. Put all the numbers on the table and decide, together, how to spend your money each month in a way that makes sense within your budget. Maybe one person does everything through checking, and the other prefers to use credit as much as possible in order to get rewards. Maybe you have better discipline when you limit yourself to the cash you have on hand; maybe the freedom to spend with a credit card has created a bad habit. Maybe you need to think about which of you has the superior credit score, and become joint users on that person’s card accounts. There are a lot of variables, and they are best tackled when they are all out on the table to discuss.
The Financial Logistics that Work for You
After you’ve budgeted and discovered where your money should be going every month, you can begin to discuss the logistics of checking accounts, credit cards, savings, and all of the options available in that realm. Many married couples choose to join their finances together into a joint checking or savings account from which their bills and all other expenditures can be paid. However, you and your spouse should choose to do what works for you. Instead of getting a joint account, you can keep your accounts separate and choose to each pay different bills from different accounts (savings, checking, credit card accounts). There’s no right or wrong answer, but each situation offers positives and negatives that you should decide on together.
- Joint accounts: Promote trust, offer a bigger financial picture, make money more accessible for both parties
- Separate accounts: Promote autonomy, leave less room for financial disagreements, have stronger security
You can choose to do one or the other or a combination of the two, but there’s nothing that says you should or shouldn’t combine finances into one account. Just be sure you and your spouse both agree on how to handle the logistics. Another positive to sharing a credit card with your spouse is the ability to accrue points faster with two people spending on it. With healthy spending habits, it can be a good thing to share your finances – but only if those logistics work for the both of you.
Changes to Make
It’s not all personal finance and budgeting that needs to be discussed once you’re married. There are also a few other financial changes you’ll need to make within some of your paperwork.
- Update your allowances on your W-4 to reflect your marriage
- If you want your spouse to be the beneficiary of your estate, or you for theirs, you’ll need to update that paperwork
- If you’re choosing to put your spouse on your insurance, or get added to your spouse’s insurance, you’ll need to update that with your insurance company
- If you are changing your name, update that information on all documentation and with companies that you have a relationship with: utilities, doctors, memberships, etc.
Taxes, retirement, bank accounts, pensions, investments, and insurance are all other financial aspects of life that may be affected by your newly married status. You’ll want to update any applicable agencies if you’d like your spouse to be able to make changes or benefit from your accounts if something happens to you. Your tax filing status will change, and your insurance may be effected. Not only that, but also with your credit cards or bank accounts. You may find savings opportunities by joining auto insurance, or renters/homeowners insurance plans.
Long-Term Financial Planning
The blending of your finances shouldn’t just be a month by month discussion, it should also involve some long-term financial planning. If you have any student loans, create a plan of attack on how to go about paying them off to increase your credit score. Talk about your credit, what your standing is, and how to improve on any issues with your credit. Discuss paying down debt, handling finances if one of you has bad credit, and what investments you can afford to make. A home loan is a common item on a newly married wish list, so meet with a financial advisor within your bank to discuss those options and what’s realistic. Don’t put off retirement planning, and factor an emergency fund within your savings plans.
If you are planning on children, that should be another financial discussion as raising a child born in 2015 was estimated at a cost of $233,610. If you aren’t planning on having children, you should discuss the options for your finances without children. As long as you’re both on the same page with your long-term financial planning and have a plan to get there, you are on the right track – even if you don’t have the financial stability right now.
Handling Financial Strain
It’s no secret that money is a common cause for strain within a marriage. It’s not hard to imagine why; money has a hand in virtually everything we do. For newlyweds combining finances and working towards a cohesive financial situation with their spouses, it’s important to work towards making money a comfortable topic. Whether one person makes more than the other, there’s an argument over who controls the finances, or one person is spending too much money, there’s bound to be an argument here or there. However, the key is open communication and understanding what each partner needs in order to feel financially safe within the marriage.
Being honest about money troubles, finding a fair way to share responsibility, and making financial decisions that will benefit the whole household are a few ways to avoid financial arguments and create a stable financial force, no matter how much money you make.
A marriage is an agreement to have your lives blend together in every way. You’re sharing families, furniture, money, pets, assets, and your favorite coffee cup for the rest of your lives. This can seem scary and confusing for those who have never had to share their income or their debt before. However, with open communication and an understanding of your financial goals, it’s quite easy to blend this area of your lives. Create a dual budget, handle the logistics however you see fit, file the correct paperwork, plan for the future, and avoid financial strains and you’ll be able to share your finances as well as you share your favorite coffee cup — or better. Hopefully, better.
How does your partner’s spending habits affect your credit score? Find out more at our credit score resource center.
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Chelsy is a writer from Montana who now lives in Boise, Idaho. She graduated with her journalism degree from the University of Montana in 2012. She enjoys talk radio, cold coffee, and playing Frisbee with her dog, Titan. Follow Chelsy on Twitter @Chelsy5
This post was updated December 21, 2017. It was originally published May 9, 2017.