Finances In Marraige

How do you navigate finances with your spouse?

July 13th, 2024 was the greatest day of my life – I had the privilege of marrying my high school sweetheart. There are a million amazing things I could discuss about marriage, but that’s not what this post is about (sorry to all of you hopeless romantics). I bring my wedding and marriage into frame for a separate reason: I want to have a discussion about what happens to your finances when you get married. Do you keep separate bank accounts or combine them? Do you consolidate credit cards or use sign-on promotions to open duplicate cards? What happens when one of you works and the other is a stay-at-home spouse??

Studies have shown that the 3 leading causes of divorce in our country are misalignment on religion, parenting, and finances. We’ll stick with the latter of the 3 for the purpose of this discussion.?

Combining Finances?

Combining finances is a topic that has a lot of differing opinions. Some will tell you that it isn’t needed, some will say it’s a mandatory action to ensure financial health in your marriage. I personally am of the opinion that you should combine finances.?

Here is what I’m doing to effectively combine my financial life with my wife, and a general guideline that you can follow if you are doing the same:

• Primary Bank/Checking Account Whether you move all of your immediate funds to one existing account or open a new one jointly, this is going to be your first step. Ensure all automatic payments are set to being withdrawn from this new account. Obtain debit/ATM cards for each person. Sign up for online access through your bank’s mobile app – an individual username will be created for each of you, but you’ll be accessing the same account?
• Emergency Fund: Some banks offer high-yield savings accounts (HYSAs) that offer 4%+ APY. Choose whether to hold this account with your existing bank where your checking/savings are located, or to shop for the best rate with another bank
• Credit Cards: If you have duplicate credit cards, decide if you want to add each other as authorized users and close duplicate accounts, or if keeping the duplicate cards for the sake of the additional benefits makes the most sense. If either of you carry debt on your cards, look to prioritize debt payment via the “Snowball” or “Avalanche” method and close those cards out.
• Investment accounts: Each of you will have separate IRAs, but having a joint brokerage account for more liquid investments is a good idea to consider
• Each person should be added as joint owners to any other assets: Houses, cars, expensive toys, etc.?

Completing all of this is a lengthy process and sometimes can feel daunting. So long as you are both committed to the mission of combining your financial lives, don’t let time be a stressor. For my wife and me, most of this process is taking weeks, and months in some cases.?

Financial Planning and Goals?

In addition to combining accounts into both you and your spouse’s names, it is incredibly important to be aligned on goals and financial planning expectations. We budget and communicate regularly about what we expect to spend in each of our monthly/yearly spending categories. While it’s certainly ideal to have these conversations prior to tying the knot, it’s never too late to start making financial discussions a priority in your marriage.?

My wife and I come from very different financial backgrounds/upbringings. She was shown and taught sound financial advice from a very young age, whereas in the household where I grew up, finances were rarely discussed openly. Because of this, conversations about financial expectations and goals in our relationship started very early for us. I recommend you have a clear understanding of what your financial habits and plans look like, and, more importantly, your partners’.?

My Personal Experience?

I like to golf…often. She likes to shop…a lot. We allow for these categories in our budget. I can’t argue that she’s shopping too much if she’s not over budget in her clothing category. She can’t stop me from playing a round of golf if I haven’t spent any of my golf budget yet. We avoid losing our individuality WHILE we remain together and in alignment. They don’t need to be mutually exclusive. We don’t feel the need to have separate bank accounts because we communicate openly about our expectations on spending, and we hold each other accountable to the promises we’ve made to our budget and each other.?

We decided that in order to build the life we want, we need to be a team. Everything I own, she owns. We are in the process of consolidating bank accounts, putting both of our names on brokerage accounts, and, moving forward, any large purchases made such as a car or house will be in both of our names.

Alignment on finances in your marriage is incredibly important. Having unity here does not only contribute to financial health, but it contributes to your ability to maintain emotional health, spiritual health and overall happiness. It truly eliminates division in your marriage that would otherwise snowball into other areas of your relationship.?

How to Get It Done

?I urge you to take a moment with your spouse to have this conversation(s).??

Some of the questions you can ask your partner are:

• What is your idea of a healthy savings rate?
• Where do you think we should put our money for our current goals?
• Do you want to attempt to fully fund college for our kids/future kids?
• What emotions does the topic of money make you feel?
• How often were finances discussed in your house growing up?
• When is your ideal retirement age?

This is not an expansive list of questions to ask your spouse but trust me when I tell you there is a lot of substance to be drawn from these simple questions. Over time, you will have more and more conversations, and you may find that the answers to some of them will change over time.

Have these conversations routinely and often. This will help to take the emotion out of financial planning. The key to success in these conversations is to listen more than you speak. Seek to not only understand what your spouse is saying but the emotions that are attached to their opinions or ideas. Alignment on finances (as well as parenting and faith/religion) will set you up for a long fruitful marriage.

Have conversations often, be vulnerable, and set clear expectations.