With the excitement of the event building, we have both begun thinking about our lives after the big day. While my background is in finance, it is a challenging decision on how to combine finances, and I believe there is no one correct answer. Combining finances is an important decision to make, one that should be discussed thoroughly, analyzed routinely, and adaptable if needed. A little bit of guesswork may be needed to get the ball rolling and open the discussions. Here are some of the ideas that can be considered:
1. Separate Accounts
The most extreme option, though easiest in terms of set up, involves simply keeping each account separate. While I personally don’t see this is an option, some couples may have different situations. The communication and planning for joint purchases (i.e. house, car) are likely going to necessitate some combining of finances, in order to both pay for the larger items, and to keep some spending equality in the relationship. This method seems like kicking the can a little further down the road, and I would rather have a more detailed plan up front.
2. Separate Spending Accounts, Combined Savings
This can be a good system to set up accountability, especially when each person earns roughly the same amount. Saving can be a designated percentage based on the couples’ needs and goals, and the rest can be spent more freely for want items (clothes, entertainment). Discussions need to be had for shared expenses, which can be easy to solve by dividing the necessities (food, gas, and bills) equally, then keeping tabs if any differences arise. While this can be a little more burdensome to track, it can also let each individual spend a little guilt free. If we have fair system in place for saving and expenses, I could feel better about spending a bit more at a Twins game (or Molly buying a new pair of shoes). Communication is important to keep things balanced and making sure one person isn’t spending too much time and money at baseball games.
3. Combine Everything
This method places initial planning, communication, and trust above all. If incomes are combined and everything is together, savings and necessity spending are simple to design based on your financial goals for the future. Where the communication is vital is for all discretionary income. Talking with your spouse about how you want to handle your purchases, big and small, can be a lot of work and a lot of worry. That’s where trust can be the best solution. Marriage is about love and trust, and having both means believing your spouse is there to care for you and look out for you; emotionally, physically, spiritually, and yes, financially. I know I can trust Molly and how she spends, and I know both of us know when to discuss any issues that may come up if the see-saw beings to tilt too far in one way. What’s important is to make sure both sides are satisfied and not feeling too restricted. From there, it’s all about sharing the wealth, and the fun!
I’ve never been married before, and I plan on keeping that experience to a once in a lifetime event. Combining finances, however, can be an every changing and evolving function. Talk with your spouse, have the right plan, and make sure to take a look and reevaluate if things aren’t working. Marriage is sharing every part of each other’s life, don’t let money get in the way of the good stuff!
Written by Mark Rosenkranz
This blog post is from the Author's perspective and doesn't speak for brightpeak financial. Contact brightpeak if you want to know more about brightpeak products, and keep in mind that they are not available in all states and there are some limitations (some exclusions and restrictions may apply).
