Getting married is a big step. There are the emotional issues of joining with another person and pledging to love, cherish and support one another for the rest of your life, through good times and bad.
While you’re sharing your life with someone, you’re also likely sharing finances, too. It can be stressful if you don’t have a plan. Sitting down to talk about your expectations should be done even BEFORE you say “I do” – it’s that important to see if you’re both on the same page when it comes to handling your finances.
Naturally, what’s right for you may not be what’s right for another couple — money is an extremely personal topic. Finding common ground is the first step in a long, happy finance future for the both of you. Most couples choose one of three ways to handle their finances after marriage.
One Spouse Handles All of the Money
This is how Mr. Saver and I do it — it takes a LOT of trust. After we married, we opened joint checking and savings accounts and closed our old, separate accounts. We still have our individual 401(k)s and stock investments, but otherwise, everything is merged. I took on the responsibility of handling our finances and paying the bills, with Mr. Saver’s blessing (His exact words were, “I never have to pay a bill again!”) Both of our paychecks go into the joint checking account, from which I pay our bills, give us “allowances” for the week, and buy groceries. We both have debit cards that we use for gas and incidentals. Since we’re both pretty disciplined when it comes to not spending a lot of money, it works out well for us.
Another important aspect of this way of managing finances once you’re married is that you should talk about who is better suited for the “job” and ensure that there isn’t any resentment caused by one person being in charge. That way, there aren’t any surprises later when you and your spouse start arguing over money.
One Household Account & Separate Savings Accounts
This works if you both want some ‘mad money’ to play with each month. While there is one main account that holds enough money to pay all of the bills, two separate savings accounts are stocked with money for extras. If you need a new work wardrobe, the money comes from your account. The same goes for the partner who wants to buy tickets to a Yankees game. I advocate a fourth account for a savings/emergency fund to tap into in the event you’re hit with an unexpected expense, such as an appliance going on the fritz or a medical bill.
All Finances Are Separate
None of your money is pooled with your partner’s. You have separate checking and savings accounts, and each pay specific bills. You might split the mortgage payment and the utilities, or one spouse pays the mortgage while the other takes care of the car payment and utilities. This is the best choice for two very independent people. It also requires a lot of trust that the other person will do the right thing.
These are three of the most common financial management arrangements for married (and unmarried) couples. Do you use one of these, or do you have an entirely different system?
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