Combining Your Finances When You Marry

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You just got married!  Time to finally rest and start your life together. Over the last several months you have done nothing but planning.  Questions and details such as: Where should we have the ceremony and the reception? Who will cater?  Band or DJ?   Every last detail was planned and executed perfectly. 

Now as you’re opening presents and writing thank you notes, you go to deposit your checks and realize there is one thing you and your new spouse did not plan for or even discuss.  Finances.  Where do you bank?  Do you each keep your separate accounts? Now that you’re married, do you combine all income and bill payment into one joint account?

Some spouses share everything with each other – including the smallest details of their personal finances. Other spouses decide to keep some individual financial decisions and details to themselves, and their relationship is just fine.   

Just as a marriage requires understanding, respect, and compromise, so does the financial life of a married couple. You may be surprised by the way your individual finances may and may not need to change.

If you are like most single people, you have two or three bank accounts. Besides your savings account and your checking account, you may also have a “dream account” where you park your travel money or your future down payment on a home. You can retain all three after you marry, of course – but when it comes to your expenses, you have a fundamental decision to make.

After you marry, the two of you may also find it best to have three checking accounts. Yours, mine, and ours? Essentially. A joint account can be set up specifically for household expenses, with each spouse retaining an individual checking account. Of course, each spouse might also maintain an individual savings account.

If you only have individual checking accounts, that forces some decisions. Who pays what bill? Should one of you pay most of the bills? If you have a shared dream (like buying a home), how will you each save for it? How will you finance or pay for major purchases?

Privacy is good, but secrecy can be an issue. Over time, that is what plagues some married couples. Even when one spouse’s savings or investments are individually held, effects from that individual’s finances may spill into the whole of the household finances. A spouse who has poor borrowing or spending habits, an addiction, a sudden major debt issue, or an entirely secret bank account may be positioning himself or herself for a money argument. The financial impact of these matters may affect both spouses, not just one.

Talk to each other about how you want to handle the bills and other recurring expenses. Discuss how you want to save for a dream. Chat about the way you want to invest and the amount of risk and debt you think you can tolerate. Combine your finances to the degree you see fit, while keeping the lines of communication ever open.

Nicole Fasano Nicole E. Fasano, J.D., CTFA is a Vice President, Wealth Advisor & Trust Officer at Alpine Trust & Investment Group

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Citations.
1 - bloomberg.com/news/features/2016-09-29/couples-can-spy-on-each-other-s-spending-with-this-new-bank-account [9/29/16]

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