Two individuals are about to be married. They both work at great jobs, great income, both are also very level-headed and responsible – which is why they waited until they both felt like they were ready for marriage. They want to share finances when they are married, but what are some of the pitfalls of doing so? For example, rather than having two people worry about paying a bill on time, wouldn’t it be better just to have that responsibility on one person? How do they decide how to break up the financial responsibilities after marriage?
3Are you asking about combining finances before you are married, or are you asking about combining finances as a married couple?– Ben Miller - Remember MonicaJun 23, 2017 at 5:22
@BenMiller After marriage.– MichaelJun 23, 2017 at 13:11
My apologies. I think I (and the other answerers) misunderstood the question. In that case, I'd have to say that this is probably a duplicate of How to organize bank accounts with wife. If you don't think it is, can you clarify how you think this question is different than that one?– Ben Miller - Remember MonicaJun 23, 2017 at 14:54
@BenMiller I think that my question differs because the one you mention talks about how to organize bank accounts, while mine asks about splitting financial responsibility. Meaning, is it best to have one person in charge of paying all the bills? Or should it be split?– MichaelJun 23, 2017 at 14:59
1That makes sense. The question is a little different, although the answers will likely be very similar. I will edit my answer to match the new question here.– Ben Miller - Remember MonicaJun 23, 2017 at 15:03
Before you are married, I recommend keeping your finances separate. However, once you are married, I recommend combining your finances completely.
In my opinion, marriage works best when you work together as a team, a single unit. You no longer have "his money" and "her money," or "his income" and "her income." Nor is there "his debt" and "her debt." There is only "our money," "our income," "our debt," and "our budget."
Indeed, if you are the one with less debt, isn't it in your household's best interest to help eliminate your spouse's debt as fast as possible? If you are the one with more income/employment, how do you quantify the monetary value of the spouse who stays at home more and manages the household? You can't, and it is best not to try. Instead, pool together all income and expenses, and work together to meet common goals.
To do this, open up a joint bank account and close your individual accounts. Meet on a regular basis to decide your household budget. If you do that, it doesn't matter who is responsible for the mechanics of paying the bills or balancing the budget. These tasks just get assigned to someone, just like any other household chore.
Usually, one of you will be more financially minded than the other, and that person will take the lead in setting the budget, paying the bills, balancing the checkbook, etc. However, it is important that both people are aware of what is going on and have access to the financial information.
In our house, I am the one who takes the lead on financial matters. I pay the bills (out of our joint accounts) and set the monthly budget using YNAB software. However, my wife has the ability to look at YNAB at any time to see the budget, and she can log into the bank website to see the transactions there as well. No secrets.
To be clear, we each have a small amount of cash/fun money that we can spend without worrying about checking in with the spouse on every little thing. But this is a small percentage of our budget, and we talk to each other before spending any significant amount of money.
What if one spouse is a lot better at finances than the other, but the other doesn't want to have shared finances because they want "the freedom to not argue" due to wildly differing opinions on how money should be spent?– AndyNov 14, 2019 at 3:37
Other than the two answers (both of which recommend waiting until marriage to actually combine finances, and which I agree with), there's the general question: how does a couple choose to manage finances?
In our marriage, it's me. I'm more numbers-minded than my spousal-unit. I'm also more a sticker for time. I work and spousal-unit does not.
We had some good friends -- upon marriage, spouse1 felt like he should take on the role. He went on a several-week trip (leaving spouse2 at home), and upon returning home asked spouse2 about the late fees. Spouse2 was appalled. Spouse2 ended up keeping the job of managing household finances.
There's enough pieces to the puzzle that it can be divided any way you choose -- any way that works for you and your spouse/virtual-spouse.
One other point: talk about how to manage your money, before you marry. Dave Ramsey recommends a strict monthly budget. I like listening to Dave Ramsey, but we've never had a budget. Instead, we agreed during marriage counseling two things:
- we set a $ limit to spending without consulting each other.
- we agreed that there was no deal so good that we wouldn't wait to sleep on it.
This is almost exactly how my wife and I do it, right down to the limit for unilateral spending. The other thing I recommend is that you store the passwords for the financial accounts in a book (locked safely in a file drawer, of course) so that both spouses have access to them. The spouse that doesn't actively manage the books should never feel like s/he doesn't have visibility into the family finances, however infrequently s/he chooses to exercise it.– NobodyJun 23, 2017 at 11:37
In theory she knows the passwords. In practice, when she needs one she asks me. :)– MichaelOct 14, 2017 at 19:28
I wish somebody had told me the "talk about how to manage your money before you marry"... which leads to the follow up question of how you recover from this after you have been married for several years.– AndyNov 14, 2019 at 4:25
I am not a marriage or counseling expert. I should think you could always suggest this to your spouse. Talk about it. Sleep on it. Then when the two of you agree, implement it as a "rule".– MichaelNov 15, 2019 at 23:58