Marriage is an incredible adventure, as two people join together and learn how to navigate life together. There are so many beautiful experiences you will encounter, but let's be real, there are some that are also quite confusing. One of the most common areas where couples face uncertainty is their finances, more specifically, whether or not they should combine them once they've said: "I do." If you find yourselves in this situation, take heart, you're not alone. The decision on whether to create joint accounts or maintain separate ones is specific for every couple, and there's no right or wrong answer. For help deciding which is the best choice for you and to find out more about why some married couples combine their finances while others don't, just keep reading.
Reasons Why Couples Combine Finances
Your marriage is as unique as you are, which makes deciding whether to combine your finances a deeply personal decision. On average, over 50% of married couples choose to combine their bank accounts, with over 61% discussing money issues at least once per week. There are many reasons for choosing this method, which are discussed below.
A greater sense of unity
Marriage is the joining of two lives and everything that comes with that. Many couples find they want to extend this mindset into their finances by opening a joint account where both incomes are deposited. Doing this means they both must come together to make financial decisions as a team, which creates a sense of unity, trust, and companionship.
Joint finances take away the complication of deciding who pays what and whose money to use for certain activities. It's especially easier when paying bills, setting financial goals, and budgeting when you both are accountable for how and where your money is spent. You both contribute, so you both are responsible for all financial decisions.
It may help your marriage succeed
It may come as a surprise to many, but there are studies showing that couples who combine their finances have a greater chance of the marriage lasting than those who don't. There are many factors that go into these findings, including the increased level of mutual dependence combined finances create, an interconnection between aligned finances and goals, and more positive interactions.
Reasons Why Couples Don't Combine Finances
Just as there are many reasons why couples may choose to combine their finances after marriage, there are also reasons why some choose not to. Depending on each spouse's personality, you may discover that maintaining separate finances is the best way to keep the peace and hedge off disagreements down the line. Additional motivations behind separate financial situations after marriage include:
Different spending styles
If one spouse is an avid spender and the other loves to save, you may find keeping your finances separate is the best way to stop arguments before they start. These two financial styles may even out over time, in which case you may decide to combine your accounts then, but as you both figure out how to manage money properly, keeping your accounts separate may make the process easier.
One spouse has a high amount of debt
Debt is crushing, and if one spouse has a significant amount, it can affect both parties' financial situations. To ensure the bills are paid, and the house money is not lost to debt collectors, married couples may choose to keep their finances separate until the debt is paid. This option is helpful to those who are actively trying to repair their financial situation as it allows them to continue to pay down what they owe without stretching themselves too thin.
Poor credit history
If one spouse has a poor credit history, you may choose to maintain your own finances, especially if you desire to buy a house or take out a significant loan in the future. By allowing the spouse with the higher credit score to continue their healthy financial decisions while the other spouse actively works to raise theirs, you can ensure there is no harm done which could affect your approval chances down the line.
Why Combining Finances Works In Marriage
Although it may be a bit rocky at first as you learn to work together in your financial decisions, combining finances is almost always successful in marriages. Of course, there's always the exception to the rule, but a vast amount of couples are satisfied with their decision to combine. Why does combining finances work in marriage? To start, it allows you to face the new expenses you will encounter as a team, which increases unity and helps ensure smart decision-making. It also provides a much-needed buffer against financial uncertainties that will arise. Additionally, simplifying your finances helps when filing taxes, saving, and planning for the future.
Pros And Cons Of Combining Money With Your Spouse
There are pros and cons to combining your money with your spouse, which is why analyzing your relationship and deciding on the best path forward together is crucial.
Exacerbates existing debt
May cause arguments
May cause a feeling of constraint
The only ones who can decide if the pros outweigh the cons are you, so don't be afraid to discuss your thoughts and feelings before making a decision.
Steps You Should Take Before Combining Your Money
Before combining your money, you can follow a few steps to ensure the process is seamless and drama-free.
Discuss your thoughts and feelings honestly.
Develop a budget.
Agree on discretionary spending and financial rules.
Make a future financial plan.
Enlist the help of a financial planner.
Marriage is an exciting adventure full of ups and downs, and deciding whether or not to combine finances can often feel overwhelming. If you're still unsure if you should join your accounts or for help on the process,we are eager to help. At Rich by Intention, we proudly help married couples navigate their finances, simplifying the process so they can focus on what matters most.