Money, Marriage, and Combining Accounts

Posted by Rebecca Prince on August 16, 2016

Combining Finances BlogAh, marriage!  The beautiful process of two people who love each other becoming one…  Sounds romantic right?  But, the collision of two individuals, lifestyles, hopes, dreams, and habits can be bumpy even for the strongest of couples.

If you’re engaged, it’s important to talk about money before saying “I do.”  How will you combine your finances?  Do you have to put everything in one account?  Just because you’re getting hitched doesn’t mean your accounts have to.  Here are six approaches to combining your finances before you walk down the aisle.

Separate But Equal Approach

This approach is great for couples who earn about the same amount and have similar debt.  The couple keeps most of their finances separate – except for one joint account, which they contribute to equally.

Couples who choose this option can set up a joint checking account for rent, bills, groceries, and other shared expenses.  Trust is key, as both people will have access to the funds.

The Percentages Approach

Using this method, the couple keeps most of their finances separate, but contributes a percentage of their income to one shared account.  It’s beneficial for couples who want to share their lifestyle, but one earns significantly more than the other.

Couples who prefer this approach should open a joint account for essentials.  Each partner should ideally contribute under 50% of their take-home pay.

The Bread Winner Approach

In this approach one person pays for all the expenses.  It works best when one partner makes much more than the other.  Picture a couple where one stays home to care for the children, or one partner goes to school.

In this type of arrangement, it’s especially important to have open communication, so conflicts about money do not arise.

The Splitting the Bills Approach

Want to contribute, but don’t earn as much as your spouse?  This approach may be a good fit for you!  Each partner picks certain bills and pays for them.  It works well for couples who would rather not combine their finances at all.

Again, communication is key with this method.  It’s important to talk things out and determine what works best for each person.

The Share Everything Approach

In this method, the couple combines their finances completely.  And while it might seem simple at first glance, it probably works best with couples who don’t have significant separate assets.

Partners who go with this approach have a couple of options.  Option 1 – they open one joint account, where they save and pay bills.  Option 2 – They open one join account for bills and savings, and they open separate checking accounts with some money that they can spend however they want.

The Save One Income Approach

Using this last method, the couple lives on only one income and saves the rest.  This method is typically a good fit when one partner has an inconsistent paycheck, or they plan to have a single income in the future.

Budgeting is especially important for couples using this approach.  They will need to use one partner’s income to pay for living essentials, bills, and groceries.  These items should total less than 50% of that person’s income.  The other spouse’s paycheck should be deposited straight into another savings account.

Money may not be the most romantic topic to discuss when you’re preparing for marriage.  But, with financial stress being the number one cause of divorce, it’s really important.  Set yourself up for a successful married life by having the “money talk” today!

Topics: Dating & Marriage