Ultimate Guide to Combining Your Finances After Marriage

Marriage is about compromise, and whether you’ve married for two weeks or twenty years, it’s important to be able to work together with your spouse. But here’s the deal—it can be challenging to work together on finances. In fact, according to a recent study, 21 percent of divorced adults cited money as the reason for their separation.

But here’s the good news: with honest communication and a shared plan, you and your spouse can tackle money as a team. In fact, as newlyweds, you and your spouse are in the perfect place to discuss money as you work to combine finances.

What does it mean to combine finances?

Joint finances mean something different for every couple. Some couples keep their money mostly separate and only share one or two bank accounts. Other couples combine everything—bank accounts, credit cards, investments accounts, and more. When it comes to combining finances there isn’t a right or wrong answer. Instead, it’s important to find the best solution for you and your spouse.

Requirements for Combining Your Finances After Marriage

Combining your finances can be a tricky process. It requires patience, empathy, and a willingness to compromise. Over the course of this guide, we’ll discuss some of the most common interpersonal hurdles newly married couples face when trying to bring their finances together.

Reaching common ground and making important decisions together is the uniquely challenging part of combining your finances. No matter what methods you ultimately choose, however, in order to successfully manage your money on a month-to-month or day-to-day basis, you’ll need these three things:

A Set of Shared Priorities

Personal money management should always begin with an understanding of what you value and what you want. Coming together as a combined household, you’ll need to merge those ideas and create a list of joint priorities that you both support and believe in. These priorities will help influence your most crucial financial decisions.

A Household Budget

At its most basic level, a budget should tell you how much money you anticipate having and where you think it will go. Your income and expenses will almost certainly change once you’re married, so it’s important that you either create a new combined budget, or revisit your individual budgets.

A Spending Plan

While your budget represents a theoretical version of your finances, your spending plan makes that theory a reality. A spending plan provides the details missing in your budget - it tells you how you’ll address your expenses and how you’ll work towards your goals. It’s especially crucial to make sure you have a plan when combining finances to avoid misunderstandings and confusion.

Those three pieces of personal finance are important no matter your relationship status. But before you make those kinds of decisions in a newly combined household, however, you have to lay some groundwork.

How to begin the process of combining finances

The hardest part of combining finances is often the first conversation. If you’re not used to talking about money, it is difficult to open up and speak honestly. Even beyond that, you might have different money beliefs than your partner. That’s why it’s important to have conversations about money before you ever actually combine anything.

Here’s everything you need to know about how to combine finances after marriage.

Be completely honest

When it comes to money and marriage, honesty is crucial. However, it’s difficult to be honest if you’re not sure about your own financial situation. That’s why it’s important to be honest—first with yourself and then with your spouse.

Marital Balance Sheet

Lauren Klein, CFP® and founder of Klein Advisors in Newport Beach, California recommends that all couples start by creating a marital balance sheet. Even though marital balance sheets are usually used during divorces, Klein explains why it’s important for spouses to begin their marriage with a sheet—or list of assets and debts—instead.

“I think everyone should know what their marital balance sheet is when they get married...It’s the real total picture of where you are as a couple. It allows both spouses to understand what’s ‘mine,’ what’s ‘yours,’ what’s ‘ours.’ It’s a way to start the marriage with a clear understanding of the total financial picture.”

Here’s what is listed on a marital balance sheet: assets (bank accounts, investments, property) and debts (student loans, credit card balances) and who they belong to.

“The rules vary from state to state, but in California, for example, what you come into the marriage with is yours. What is earned during the marriage belongs to both spouses. So when you get married, the wedding gifts go in the ‘ours’ column,” Klein explains.

• To do: Review your financial situation and create a martial balance sheet with your spouse.

Deal with Surprises

After you complete the marital balance sheet and share your finances with one another, you and your spouse will need to deal with any financial surprises. Whether it’s an unexpected credit card balance or staggering student loans, you and your spouse will need to come to terms with your current financial status.

For Rachel Smith, a blogger in Grand Rapids, Michigan, the surprise was her husband’s six-figure student loan balance.

“My husband thought he had $65,000 in student loans. After we got married, we both found out he actually had $165,000. It was a horrible way to begin our marriage and much of our financial journey was defined by this,” says Smith.

Smith and her husband are now debt-free, but the journey hasn’t been easy. One of the primary ways they were able to get through it was with shared goals and judgment-free conversations.

• To do: Have an honest conversation with your spouse about any unexpected money news.

No Judgment

It might be difficult, but one of the best ways to have productive money conversations with your spouse is to create a judgment-free space. Regardless of your better half’s financial situation, it’s important to approach it with compassion and neutrality as you work together to create a plan.

Derek Bostian, CFP® and managing partner at Two Waters Wealth, has some suggestions. “Try to sit down with your partner and try to have a transparent conversation with them," says Bostian. "Make sure that you are getting on the same page. At the end of the day, I think people overestimate their spouse’s reaction to financial news—both negative and positive. Ultimately, you need to find a way to work through the financial hurdles together.”

• To do: If you need time to process your spouse’s financial situation, ask for it. Set a time and date when you will “meet” again to discuss money.

Get on the same page

Once you’ve had the first money conversation, it’s time to get on the same page as your spouse. It’s impossible to create an entire financial plan in one meeting, so it’s important to continue the conversation as you start to work together on finances.

Regular Conversations

“Shortly before our wedding, my wife and I had a ‘financial summit’ where we sat down and discussed everything,” says Chris Ball, a financial advisor in Royal Oak, Michigan. “I had a lot of debt at the time and was open with her about it and my desire to eliminate it.

“We talked about first year goals and what we wanted to accomplish together. We combined our finances and did regular monthly checkups, usually combining it with a date night. As we achieved goals, we created new ones, and we still do this after eighteen years.”

Bostian echoes this advice, “It’s not a one-time conversation. It’s something that you need to continue to revisit. At the end of the day, marriage is one of the biggest business decisions you’ll ever make.”

• To do: Schedule regular money talks. At the beginning, the talks might be weekly. Later, you might transition to monthly talks.

Avoid Fights

It might be tough to talk about money, but that doesn’t mean you need to fight about it with your spouse.

“Fights and conflicts are a part of any relationship, no matter how much you want to avoid them,” says Bostian. “There’s a strategy where you each get two minutes to voice your opinion and then the other person has two minutes for their rebuttal and then you keep going until you find a solution. Be sure to find common ground together.”

Similarly, Justin Pritchard, a CFP® at Approach Financial in Montrose, Colorado suggests that couples strategically choose times to talk to avoid unnecessary fights.

“Set a dedicated time for money conversations. That ensures that everybody is mentally ready to discuss the topic. Nobody should be hungry and you don’t need to be ‘on [your] way out the door’ during the conversation. This way, the person initiating the conversation won’t feel dismissed if their partner doesn’t have the time, energy, or desire to have an impromptu discussion.

“If things get heated, agree on a way to take a time out, and remember that the way you ask for a time out is as important as taking one.”

• To do: If things get heated, give your spouse two minutes to talk. Afterwards, you get two minutes to respond. Keep going until you reach a solution.

Acknowledge your differences

Here’s the deal—you and your spouse are different people with different backgrounds. That means that you have different experiences with money and different expectations. Instead of viewing your differences as a problem, try to see them as a source of strength.

“Recognize that when you’re talking about money, you’re dealing with a lot more than money,” says Pritchard. “How each partner feels about the outcome is more important to the relationship than what you actually do with your dollars.”

Here are the questions Pritchard says couples should answer when they make a financial decision together:

• Does it feel fair to both people involved?
• Did you speed past something significant?
• Did you unknowingly hit a nerve that your partner is sensitive to?

Klein agrees that it is often hard to discuss money. “People say talking about money is the last taboo in our society. How do you have a conversation about what you need and what you want? You come from different families. You need to have this conversation about what you want to spend your money on. This could be a budget, a roadmap or a plan.

“If you don’t have the skill and can’t have a conversation [with your spouse] about money and have it be productive, then it might be a good idea to work with a third party.”

• To do: Sit down with your spouse and make a list of each other’s strengths and weaknesses. Once you’re done, discuss the lists and talk about how it might relate to money management.

Create systems

Even though money mindset is important, it’s also important to create money systems. Money systems might include rules, account set-up, apps, and defined roles.

Money Rules

Every couple is going to have different money “rules.” For some couples, there might be rules about frivolous spending or ways to track spending.

Laura Beattie, a personal finance blogger in Portland, Oregon suggests two rules that couples should use.

“Talk about spending and decide if you will each have a monthly ‘whatever’ fund. Also, decide at what price point, or item size, you should discuss a purchase with your partner. Examples of this might be spending over $150 or buying a 12' inflatable snowman for the yard. Not only is it a way to do a quick check on the finances, but it’s a good check-in with your partner so there aren’t any surprises.”

• To do: Work with your spouse to create money “rules” for your marriage.

Joint Accounts

Even if you don’t want to combine all of your accounts, it’s still a good idea to have at least one joint account for shared expenses.

Bostian explains, “Once you’re married, you should open a joint account. If you’re not ready to take the big step of combining everything, you can start small and pay common expenses.

“I would start fresh with a new account because it makes everything cleaner and easier to manage. It’s something you should do right when you get back from your honeymoon if you go on one. It’s a big event and it’s important to take that step together.”

• To do: Open a joint bank account with your spouse.

Track Your Money

Another great way to avoid fights about money is to track your spending. When you track your spending together, there aren’t any surprises.

“There are some great personal finance management software,” says Bostian. “I really like Mint because it lets you see what’s going on with your checking accounts and credit cards—all the ways you spend money. It will classify your expenses for you and track your spending.

Knowing where your money is going is just the first step. I always joke with my clients that when they first start doing this, they will have to resist the urge to scream when they start seeing the other person’s expenses. But it’s not about power; it’s just about transparency.”

• To do: Explore money tracking and budgeting apps like Mint, Good Budget, You Need a Budget, and Tiller.

Assign Specific Roles

There’s a good chance that you and your spouse have different strengths and weaknesses. Luckily, that’s a good thing because it might allow you and your spouse to have different “jobs.”

Gabriel Kaplan, a CFP® and CPA in New York City, explains, “My wife is incredibly frugal, and barely spends money on anything. She currently outearns me by a wide margin as I'm growing my business. We came to an arrangement based on the strength of our abilities. She is a much better at getting things done than me so she is the Chief Financial Officer. I'm the Chief Investment Officer and the Tax Planner.

We agreed on a savings rate, deducted our living expenses and then allocated what was left over to ourselves...We are both happy as our financial plan is on track. Things have worked out because we stick to our budget and we both trust the other person is responsible.”

• To do: Work with your spouse to divide up the financial duties based on your strengths and weaknesses

Live, Learn, Evaluate, and Try to Do Better

Whatever method you choose, it’s important to remember that nothing is ever set in stone. You should always be evolving your methods (and your goals and your priorities) as life moves along.

So set up a plan and then do the best you can with it. When you come back together, talk about what worked, what didn’t, and how you felt things went. Use that information to determine what changes to make to your approach, then make those changes and start the process all over again.

It’ll never be perfect, but it can always be better.

Bottom line

Here’s the good news—you and your spouse will continue to get better at managing money together. The more you work together, the easier it will be to work together. That’s why it’s important to not be discouraged during the first few conversations. Ultimately, money is a part of life, but it’s not everything. Shared goals, common values, and open dialogue will help you and your spouse create a happy and wealthy life together.