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  • Shirley Sanchez, CFP®, MS

Merging Your Money When You Marry

Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

Discuss your financial goals

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.

Prepare a budget

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.

Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.

Bank accounts--separate or joint?

At some point, you and your spouse will have to decide whether to combine your bank accounts, keep them separate, or employ a blended strategy.

Maintaining a joint account does have advantages, such as easier record-keeping and lower maintenance fees. With everything in one place, you can easily monitor, track and plan for expenses. Having a joint account can also promote teamwork, trust and can help you work toward common goals together. However, there is also a potential for arguments, as you might feel the need to discuss every purchase. A solution can be to set a ‘guilt-free’ spending limit where one can feel free to spend on expenses that are below the dollar limit but will consult with their partner if the expense will be greater.

Some advantages of separate checking accounts are potentially fewer money arguments since you won't have to justify every purchase. The downside is that it can be hard to keep track of bills.

You could also opt for a blended strategy, where you combine joint and separate accounts. With this strategy, you can funnel (direct deposit, for example) each of your paychecks to your joint account for your household expenses, and then do an automatic transfer to your separate account for personal spending. You can talk about what amount that might be. This way, each individual can feel free to spend money in their ‘own’ account as they wish, as all of the main expenses are already covered. Or, you can have your paychecks sent to your separate checking accounts, and then transfer an agreed-upon amount to the joint account to pay for household expenses and bills. You’ll want to make sure there is enough in the joint account to account for all expenses.

Whatever you two may decide, the important thing is being on the same page for success!

Credit cards

You should carefully think about adding your name to your spouse's credit card accounts. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.

If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.


If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.

It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.

Employer-sponsored retirement plans

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:

  • If both plans match contributions, determine which plan offers the best match and take full advantage of it

  • Compare the vesting schedules for the employer's matching contributions

  • Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs

  • Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision


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