We’re Getting Married – Should We Join Our Accounts?

Money is one of the biggest stressors in a relationship. There’s no one right way to handle finances in marriage, and the best choice is ultimately what works for you and your spouse. Although some of us want to go into a marriage sharing everything, smart financial planning actually dictates that you don’t have to… and in many cases shouldn’t. Here’s a system many couples start with.

Three pots

In the “three pots” system, each spouse contributes money to one money “pot” for household expenses, and his or her own “pot” for individual expenses. No one gives up their independence or autonomy completely, but some finances mingle. Maintaining separate accounts isn’t a sign of distrust. In fact, the opposite is true. Allowing your partner to maintain financial independence sends the message that you trust that person to not keep secrets about finances, and to contribute responsibly to your financial life together. Autonomy also fosters self-confidence. That feeling of control over your own money is critical for many, many men and women.

Keep a joint bank account for joint expenses

Having a joint account for shared expenses can really simplify bookkeeping for the household budget. Both spouses don’t have to contribute equal amounts (and shouldn’t if one earns significantly more than the other), but the total each month should cover everything you’ve agreed to pay together, like the mortgage, utilities, groceries, insurance premiums, auto loans and so on.

Create a detailed budget together

You need to know exactly where your money goes and how much you need each month to cover all of your expenses. Once you start spending someone else’s money, it’s important that you’re able to account for it. The household budget must only include things you both agree to pay for together.

Keep separate accounts for separate expenses

Costs that are related to the passion of one spouse are prime targets for separate budgets. Maybe one enjoys concerts and the other collects books. These optional purchases may be made with money set aside by each person in a personal account.

Use the same rules for credit cards

Credit card accounts do not become joint accounts upon marriage. Consider opening a joint account for charging things – family vacations, for example – that you’ll pay off together. Successfully managing credit cards in marriage is to practice total honesty with each other. Don’t hide purchases, especially debt. Your separate credit card debt won’t affect your spouse’s credit score, but it will affect your ability to move forward as a team with large, important purchases, like a home.

Most important: save together and communicate frequently

Part of your financial life together must be to save. Make a plan for building an emergency fund, and for building retirement accounts for each spouse. If you have children, discuss whether and how you plan to help them pay for college – one of you might be willing to borrow money later on while the other prefers to start saving early. Touch base about financial details at least several times each year (monthly if income or expenses tend to fluctuate). Don’t keep secrets.

About the author

Kimberly J. Howard, CFP®, CRPC®, ADPA®

Kimberly J. Howard, CFP®, CRPC®, ADPA® is the founder and owner of KJH Financial Services in Newton MA and Denver CO. She enjoys helping clients explore and achieve their life goals through effective comprehensive financial planning.

Kimberly holds a Master of Science degree in Computer Science Information Management from Boston University. She earned a Bachelor of Science degree in Mathematics and Physical Education from Stephen F. Austin University in Texas. She attended Boston University for her Certification in Financial Planning and H&R Block for Tax Preparation Certification.

Kimberly is currently an adjunct faculty member at MetroState University where she teaches General Financial Planning Principles, Income Tax, Retirement Planning and Estate Planning. She is a past adjunct faculty member at Boston University and The College for Financial Planning.

Kimberly is a member of the Financial Planning Association (FPA) and The National Association of Personal Financial Advisors (NAPFA). She was named to the Metropolitan Who's Who Among Executive and Professional Women. She is an expert Advisor for Nerdwallet, BrightScope, Morningstar, and FiGuide.

Kimberly promotes a life planning approach with a balanced work/life style. She is active in sports including cycling, golf, skiing, and hiking.

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