Options for Combining Marriage Finances

One of the most important decisions any couple must decide is how to merge their finances after marriage and how are they going to handle the bill paying.  It is important for financial harmony for each partner to have access to money for which they don’t have to answer questions, but, as always, the personal spending must be in harmony with the family’s priorities and does not bust the budget.

There are basically three options for combining marriage finances:

  1. Merge separate accounts into one.
  2. Keep separate accounts and each person is responsible for paying specific bills.
  3. Each person keeps a separate account for their own spending, but most of the income goes into a joint family account that is used to pay family bills.

1.      Merge separate accounts into one.

This may be the traditional method.  It is still important that each spouse must have freedom to spend personal money without recriminations, but without busting the budget.  It is vital that regardless of who pays the bills, each partner must still stay informed about the family finances and know what their personal spending level can be without breaking the budget.  Agree upon a dollar amount over which both must agree upon a purchase.  Use online banking so each can review the bank balance any time.  The challenge is that without meticulous budgeting or some tool to track your spending, it is difficult for each person to know how their spending is affecting the family’s finances.  A potential tool to enable each partner to manage and track their individual spending is for each to retain separate credit or prepaid debits cards with a low credit limit consistent with the family budget.  This could enable each to better monitor and limit their individual spending.  Even if you merge all your accounts and finances, it’s still a good idea for each partner to retain a credit card in their own name.  This continues their separate credit history in case it is needed.

2.      Keep separate accounts and each person is responsible for paying specific bills.

This is probably the most common method among unmarried couples living together.  Assign the biggest bills to the partner with the biggest income.  It can be inflexible for handling savings goals, bills that vary widely from month to month, and unplanned bills.  Family spending should still be discussed, coordinated, and harmonious with the family budget.

3.     Each person keeps a separate account for their own spending, but most of the income goes into a joint family account that is used to pay family bills.

With this method, you must start by calculating the family budget needs including savings goals.  A reasonable left over amount could be divided into the two separate accounts for each spouse’s individual spending.  This puts the family budget first while making it easier for each partner to manage their own spending without breaking the family budget.  It can also enable each to better monitor their combined ATM, debit card, credit card, and checking purchases in one personal account.

Whatever method you agree upon can be revised or changed, but it is essential that each partner have personal money to spend and a method to ensure that it does not bust the family budget.  This protects the family’s financial security and better ensures marital harmony.

About John Kimball

Over the past few decades, I have experienced most of these financial issues with both mistakes and successes. I sure wish someone had told me these things when I was first starting out. So many times I have cried out, "I want a do over!" when I learned a new financial lesson or tip. I aim to pass along to you the financial insights I have gained from experience, reading, analysis, and living the financial aspects of managing, saving, investing, and spending your money. I am an analyst with a large organization and happily married with two children on their way to an expensive college, no doubt. I read numerous financial blogs, websites, newsletters, magazines, newspapers, and books to bring you the latest news, insights, tips, and lessons combined with decades of experience.

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