Tips for Couples Combining Their Finances After Marriage

Working together to manage your money may make life easier.

Whether you're just back from your honeymoon or you've been married for years, figuring out how to manage money as a couple is a continuous journey.

As you begin managing finances as a couple you realize it's not just about merging bank accounts, but also working together to forge a path toward a shared successful future.

Let’s take a look at two approaches to managing your money and see how they compare on a variety of tasks, from crafting budgets to preparing for taxes.

Key Takeaways

• Merging finances as a married couple requires open and honest communication with your partner.

• Whether you fully merge all accounts or maintain some autonomy, flexibility is key.

• Combining your money is about more than dollars – it’s an opportunity to align your visions for the future.

Choosing Your Merging Philosophy

When you say “I do” to the love of your life, you're also saying “I do” to taking on financial decisions together. Finding the best way to manage your finances as a couple is a personal decision that involves communication and compromise.

While there's no one-size-fits-all approach, there are two primary options available if you're looking to join your accounts. These two approaches are:

• Fully Merged. In this model, both partners share equal responsibility for all financial decisions and responsibilities. They are listed as co-owners on most or all accounts and work together to make choices about purchases and financial goals.

• Hybrid. In this model, each partner maintains some autonomy over certain financial decisions while working together on others. The amount of autonomy is up to you but may include joining money for shared expenses and keeping money separate for other situations.

Once you've discussed which of these approaches is best for your partnership, you’re able to begin applying the approach to your finances.

7 Money Merging Conversations to Have

As with most things in life, preparation is everything. Taking some time early on in your marriage to discuss and strategize about your finances may set you up for future success. (And perhaps even a happier partnership?)

1. Setting Financial Goals

A great first step to merging your finances is to make sure you’re on the same page about your future. Identifying significant financial goals, such as home ownership, raising children, emergency savings, travel, and retirement could help to set a stronger foundation for your life together.

For couples taking a Fully Merged approach, the planning steps tend to be pretty straightforward: discuss what goals you have, prioritize them, and determine how you want to go about contributing toward them. (Perhaps easier said than done.) This may include setting money aside each month for a down payment or adding to your investments on a regular basis to help them grow.

For those taking a Hybrid approach, the planning process is a little less straightforward. Start by discussing each of your financial goals. Then, determine which goals are shared and which are individual. Be sure to identify which joint and independent savings goals have conflicting timelines and adjust as needed.

Aligning your future with another person is tricky, regardless of the approach you take. But open communication, compromise, and a bit of organization could help make the process a little smoother.

2. Creating and Combining Plans

After determining some of your long-term goals, a good next step is to connect on your money management system.

Everyone comes to a relationship with a different money management style. Some people are budgeters, some people aren’t… and that’s okay.

For the Fully Merged approach, it’s important to have transparency around money flows… how much money comes in and where it goes each month. If you track your money, it’s easier to have an effective conversation about how to spend or save it according to your goals.

You may choose to create a joint budget. If you do, this joint budget could include your combined income, all of your expenses, and also have a savings line item (or two or three) for future goals, such as a house, college education savings, emergency fund, etc. Tech tools, like money apps, could help with this process.

For couples sticking with a Hybrid approach, it’s important to start by deciding which expenses you plan to share and how much each of you plan to contribute. Again, you may set up a budget, you may not. But using a tracking tool for joint spending, even if it’s a spreadsheet, may be a big help.

The contributions in the Hybrid approach may not be equal, depending on each person’s career and role in the household. Tech tools are an option for easier money movement. Setting up auto transfers between accounts or for bill payment could help reduce questions around who’s paying what, when, and how much.

And if you have any money left over? By design, the Hybrid approach allows each individual to manage their remaining funds in their own way, which could make this approach appealing to some couples who enjoy a bit more autonomy.

3. Opening Joint Bank Accounts

To bank jointly or not, that is the (next) question.

Joint bank accounts, typically a checking or savings account, list both partners as account holders and give them equal access to the funds in the account.

Couples who choose Fully Merged finances usually have a single joint transactional account where they both deposit paychecks and use the funds to pay bills. For savings, couples may have additional (joint) accounts, especially if they want to take advantage of high-yield options at different banks.

In the Hybrid approach, couples may choose to have a joint account for shared expenses with contributions from their respective incomes. Then the rest of their incomes could go into their separate, individually held accounts.

4. Merging Credit Cards

Most married couples use credit cards for a variety of household spending—from cleaning supplies and groceries to furniture and appliances. Credit cards usually only allow for one primary account holder, a constraint that may drive how you approach credit card management.

For couples who want to have Fully Merged finances, someone must take the lead as primary for each credit card held and then they are able to name the other as an authorized user. Some credit cards offer account manager designations providing joint control over the account. That could be a helpful option for those who want to ensure both partners have equal control over these accounts.

For those using the Hybrid approach, how you use and pay credit card accounts is directly related to decisions you’ve already made about shared expenses and bill payment. You may decide to have credit cards together for joint purchases, and if you do, you’d face the same primary/authorized user decisions as couples with Fully Merged finances.

5. Discussing and Dissolving Past Debt

Debts are probably going to be one of the trickiest aspects of merging your finances.

Couples taking the Fully Merged approach may choose to adopt each other’s debts, either formally or informally. Formally joining your debts could include refinancing existing loans or opening a joint debt consolidation loan. Informally joining them could mean you agree to work together to pay off each other’s debts using your combined income.

Debts such as home or auto loans are typically mergeable only if you choose to refinance the existing loans. Refinancing usually involves paying off the existing account and taking out a new loan against the asset.

For unsecured debts, such as credit cards, a debt consolidation loan could be a good option—they usually provide lower rates than credit cards and fixed, predictable monthly payments. You may be able to combine your individual credit card balances together into one debt consolidation loan and tackle the repayment together.

For those taking a Hybrid approach, you have even more possible paths—communication and planning could greatly impact your success here. You may choose to keep your prior debts separate and pay them down from your own, individual income. Or you may pick and choose past debts that you repay together and consider a refinancing option. Of course, you could also choose the route of a separate or joint debt consolidation loan.

One quick note on debts – if you live in one of the nine “community property” states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) debts taken on during your marriage by either spouse is owed by both of you.¹ There are some exceptions, but generally if you live in one of these states and either of you opens a loan or runs up a credit card, both of you are on the hook for paying it off.

6. Creating Investment and Retirement Plans

When you get married, you may choose to integrate your individual investment and retirement savings strategies into a cohesive plan. However, IRA and 401(k) accounts are individual. So, no matter what your approach to money management is, these accounts stay separate.

Other investment accounts, such as stock portfolios or brokerage accounts typically allow for couples to create joint accounts. Discuss your options with an investment or tax professional, as combining accounts may allow you to save money on fees, make management of these accounts easier, or possibly lower your tax liabilities.

For couples taking the Fully Merged approach, you’d likely choose to have joint stock and brokerage accounts. On the flip side, if you choose a Hybrid approach, you’d likely keep at least some investment accounts separate.

Bear in mind that the discussion about community property also applies to investment assets! (Yet another question to ask your favorite investment professional.)

7. Talking About Taxes

Merging finances as a married couple has several tax implications. Regardless of how you choose to manage your money day-to-day, you may choose to file jointly or separately when tax season rolls around. Filing jointly often offers more favorable tax rates and access to deductions and credits, but every situation is different.

As always, tax professionals are a great resource to help you understand your tax options.

Final Thoughts

Combining finances may not sound like the most exciting part of married life, but it's a crucial step toward financial harmony and a bright future together.

Whether you take a Fully Merged or Hybrid approach, by working together to align your financial goals you may be able to optimize your resources, enhance your investment strategies, and streamline your financial management.

It's essential to find a balance that works for both of you. Some couples choose to share all accounts to reinforce shared responsibility, while other couples prefer to keep some financial separation for personal autonomy.

Whatever approach you take, remember that merging finances is not just about managing money, but also about building a solid foundation of trust, teamwork, and shared aspirations for a prosperous future together.