The Why and How of Combining Finances in Marriage

Updated: July 15, 2023 |

Taylor Kovar, CFP

Money and Marriage: How to Share Your Finances

It’s a common debate among couples of all ages: should we or shouldn’t we combine our finances after marriage? Should we merge all our accounts so we’re working off one ledger? Should we keep things separate and not ask questions?

The answer is a little murky and may change depending on circumstances. Certainly, you’ll find happy marriages on both sides of this debate. Different married couples also have different reasons for keeping their money separate or using a joint bank account. When you get right down to it, the specific decisions the two of you make with your assets depend on your situation and future goals.

With all that in mind, if you don’t have a particular reason not to combine your money, a lot of good things can come from doing so.

Build trust and support
Weed out financial infidelity
Create more common goals

The the things that may cause you to hesitate to give your spouse access to everything — including secret debt and irresponsible spending — are the same reasons why it’s important to share finances in marriage. When married couples combine their money and create a system of mutual, respectful oversight, it can put an end to a lot of those problems while bringing the couple closer together.

If you’re going to combine finances after marriage, you have to do it right. A lazy or sloppy effort will have you chasing credit card bills and trying to get names changed on accounts for months to come. There are only a couple steps to this process, but each task comes with a lot of details in need of attention.

1. Create a Combined Money Network

When you share your finances, it’s more than just a joint bank account both of you can access. All of your sources of cash and credit are intertwined; you and your spouse have to take a step back and look at the big picture of your combined money management.

Primary Banking Choice

This can be more contentious than you might expect. People become attached to their banks. Whether it’s the location of the nearest branch, the amount of time they’ve held the account, or some specific perk they get, it can be hard to convince someone to close a bank account and move their money somewhere different. When you join forces, one of you will have to say goodbye to their old account — when it comes to money and marriage, compromise is just a fact of life.

If you both use the same bank, the decision becomes a lot easier. Go to a local branch or use the online advisor to start the process and go with whichever joint bank account has a better interest rate or more direct deposits/auto-debits already set up. If the accounts are practically identical, you may just need to flip a coin.

For couples banking at different institutions, you have more questions to answer. Does one bank feel like a safer place to keep money, or is one more convenient than the other? Does one seem like it will make completing the money-combining process easier? Did one of you just order hundreds of checks you don’t want to go to waste?

This is also a great time to look at new banks. If you’ve had your money sitting in the same low-APY account since you were 18, you might want to seek out greener pastures. You’re about to combine accounts and increase your shared savings balance, so have a look around and see who can offer you the best interest rate. There are a lot of online banks that pay solid interest on savings accounts if you don’t mind forgoing the physical bank where you can walk in and deposit cash.

There’s also a psychological perk that comes with choosing a new bank, as it’s an opportunity to explore how you’ll make decisions about finances in marriage as a team. As long as you agree on which bank to choose, it becomes the first mutual decision in your new lives as mutual account holders.

Whatever you end up deciding, you need to figure it out and get the new account open so you can transfer money from the old accounts. After that, it’s on to the nitty-gritty of making shared money and marriage work smoothly.

Credit Cards

Some married couples want to combine savings and checking but keep their own credit cards. This can be worse than just leaving everything separate, though. Once you start using combined resources to pay bills, you both want to know exactly what bills are getting paid.

That doesn’t mean you have to cancel and open all new credit cards (though we’ll talk more about credit card canceling in a moment); you just need to get both names on whatever accounts are being used and make sure everyone has access to see what spending is happening.

That might make you sweat a little. My spouse will see every purchase I make? Yeah, that’s the idea. You’re committed to each other, you’ve delivered vows and started a life as one—being honest about how you spend your money seems like a logical part of this progression.

For a lot of people, that will mean curbing their impulse spending. It means becoming less comfortable carrying debt and paying interest on credit cards. With oversight from your spouse, you’ll think twice about ordering a steak when you should get a salad. It’s easy to lie to ourselves about questionable spending habits; it’s a lot harder to lie to someone who might call us out on our poor decision-making.

Since you’re combining accounts, you get to decide which ones are worth keeping and which have to go. If you each use three different cards, you need to get rid of at least two. There’s no reason for one married couple to have six credit cards. A rotation of 2-3 cards is great for building credit and getting rewards; if you have any more than that you start diluting your reward potential.

Things to consider when picking which credit cards should stay and which get the axe:

Lowest interest rate
Best perks
Outstanding balance

Obviously, you can’t just cancel a card with a $2,500 balance on it. The money owed on each may end up making the decision of which cards you keep for you. Alternatively, you could use this as the watershed moment where you pay off the balance and kill that card forever. It’ll feel really great to move into this new phase as a married couple with combined money if you have fewer outstanding balances dragging you down.

While it’s important to have good credit cards with usable rewards, this decision shouldn’t be as important as which bank you use. It’s easy enough to get a new credit card down the road; what you choose now isn’t binding.

Once you’ve settled on the specific cards, make sure both of you are on the account and then get those cards linked to the new joint bank account. Now, you can start paying down debt and racking up points as a team.

Loose Ends

Not everything needs to be in both of your names; sharing money and marriage doesn’t have to mean giving up your individuality. You are still separate people outside your married household, with different jobs and personal paychecks. As such, you have to make sure you each have your personal ducks in a row.

This means things like life insurance and investment accounts and cell phones and direct deposit need to be handled. You’ve dealt with all these things before, but now your actions are felt or seen by your spouse. Failure to set up that direct deposit might lower the APY of your new joint checking account. If you waste a couple months forgetting to connect and contribute to your IRA, that’s affects both of you.

Automation is awesome, as it keeps our bills paid on time without taking up any brain space. Unfortunately, any shift in that automated process means you have to remember how many things get done automatically and switch them all over. Chances are good you’ll miss a couple, so just be ready to respond promptly when you get that “payment not received” notice.

With your new bank account opened, your credit cards merged and reduced, and your autopay all set up, you’ve entered a new stage as a married couple with combined finances. At this point, it’s time to develop a workable system for making the most of your combined accounts and shared financial insight.

2. Create a Budget

Every so often, two people with similar approaches to budgeting meet and fall in love and everything is bliss.

The rest of the time, married couples have to learn how to coexist financially without losing their minds.

Money becomes important at a very young age. The habits we develop and our Money Personalities are entrenched well before marriage and thoughts of sharing finances with another person ever comes into play. As such, there’s a lot of negotiating to be done when two people start operating with one bank account. Combining finances after marriage is as much about understanding each others’ wants and needs as it is about dollars and cents.

The budget you and your spouse establish (and the process you follow for doing so!) will set the stage for how you work out so many things in your life together. At face value, the budget is just about how you spend the money you earn. Upon further inspection, a budget really shows what’s important to a person—and how a married couple manages their shared values and personal preferences.

The Percentages

As a starting point, it’s a good practice to think about your money as a whole and where it all goes. Food, savings, gas, housing, bills, children, clothes, entertainment… the list of expenses goes on forever, so you need to establish some big categories before you get into the little ones. Here’s a simple split for you to build off:

10% to savings goals
10% to investments
10% to tithing/charity
70% to cost of living

On any given month, your money should be poured into those categories in roughly these proportions. Some months, you’ll be able to put away or invest more; other months you’ll barely scrape by and be ever so happy your rent check cleared. This template is just that—an example for you to work with and base your goals on.

That said, doing your best to stick to a breakdown like this will do wonders for your ability to plan and save for the future. If you don’t commit to 10% for investment accounts, you’ll find excuses not to “pay yourself” and spend that money on more frivolous things. If you don’t put a system of charitable giving in place, you’ll find plenty of other ways to spend that money, and the act of giving won’t become part of your routine.

When times are tough, thinking about retirement and tithes doesn’t always feel reasonable. When you set a budget that’s in line with your values and your money and marriage goals, these percentages don’t seem quite so daunting. Once it becomes habitual, you’ll accomplish that 10/10/10/70 split without even thinking about it.

The Specifics

There are all kinds of budgeters. Some people need to make sure they have enough money in their bank account and then they just spend evenly across all categories. Others need a detailed breakdown of where every penny is going and when a new penny will replace the one just spent.

Once you become a married couple with combined money, you need to figure out what type of budget works for you. Play around with a spreadsheet or an app and see how you can track your spending and saving in a way that feels more productive than tedious.

This is where you make important choices about how 70% of your earnings get spent. What groceries are you buying and where do you buy them, how much money goes to dining out, what are your short-term savings goals, etc. Finances in marriage are a pretty common source of arguments, and these usually stem from day-to-day spending as opposed to major things like 401(k) contributions.

If you’ve only just combined your money after marriage, you may find yourself having intense emotional reactions to spending — both your spouse’s and your own. Suddenly, you’re questioning how often your husband gets his hair cut, or wondering why your wife needs to go out to lunch every day instead of bringing food from home. The decisions nobody saw coming when you each had total control of your separate bank accounts are now out in the open for another person to analyze.

When you have conflicting Money Personalities — one of you loves to spend while the other loves to save, for instance — these issues are even more pronounced. Instead of leaving each to their own devices, a shared, agreed-upon budget can help create necessary compromises so both of you has a say and a stake in the family finances. You have joint passions and individual pursuits, and a thoughtful budget can help you realize all of those dreams.

Remember, you’ve already committed to a lifetime together. The big decision has been made. While you may think you can enjoy married life together while also living as independent financial beings, separating money and marriage is a lot harder than it sounds. Learning to work as two halves of a whole usually makes things a lot easier.

Don’t be fooled: you’ll still have money fights. You’ll disagree on what to buy and how much you can afford to spend. A happy marriage does not automatically preclude these things happening. However, if you put your funds in a joint bank account and create a saving and spending system that works for both parties, you’ll feel much more secure in your financial situation. When everyone is equally committed, married couples who combine money usually come out ahead.