Should Couples Combine Their Finances?

Some couples elect to consolidate their personal finances, while others largely keep their financial lives separate. What choice might suit your household?

The first question is: how do you and your partner view money matters? If you feel it will be best to handle your bills and plan for your goals as a team, then combining your finances may naturally follow.

A team approach has its merits. A joint checking account is one potential first step: a decision representing a commitment to a unified financial life. When you go “all in” on this team approach, most of your incomes go into this joint account, and the money within the account pays all (or nearly all) of your shared or individual bills. This is a simple and clear approach to adopt, especially if your salaries are similar.

You need not merge your finances entirely. That individual checking or savings account you have had all these years? You can retain it – you will want to, for there are some things you will want to spend money on that your spouse or partner will not. Sustaining these accounts is relatively easy: month after month, a set amount can be transferred from the joint account to the older, individual accounts.

You may want separate financial accounts. Some couples want to pay household bills 50/50 per partner or spouse, and some partners and spouses agree to pay bills in proportion to their individual earnings. That can also work.

 This may have to change over time. Eventually, one spouse or partner may begin to earn much more than the other. Or, maybe only one spouse or partner works for a while. In such circumstances, splitting expenses pro rata may feel unfair to one party. It may also impact decision making – one spouse or partner might think they have more “clout” in a financial decision than the other.

My view as a tax professional and financial planner is many marital difficulties have roots in financial issues.  Selecting a financial discipline (Joint, single or hybrid) that is mutually agreed upon may help to avoid some conflicts in the future.  Keep in mind that financial decisions are not “One & Done” arrangements; they should be flexible and subject to modifications as you mature in your relationships and careers.  Consulting with a financial planner can assist you in navigating your financial plans and goals.

Bill Coscioni, CFP®, CPA

WealthCare/Financial Planners, LLC

910 Dougherty Rd.

Aiken, SC 29803

O-803-644-0701

bill@wealthcare910.com

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