Combining Finances after Marriage

How to transition from personal finance to effective household budgeting.

merge your finances into joint accounts

A happy marriage isn’t easy – and fights about money definitely have the potential to get in the way on any given day. After all, it’s hard enough to achieve and maintain financial stability as an individual. Things get much tougher when you have two people with their own habits and perspectives trying to work together to achieve financial goals.

On the other hand, when handled correctly, having a partner to support and stand with you in the face of financial challenges can be highly beneficial. While you may be bad at saving but good at paying off debt, your spouse may compliment you by being a big saver but not so well versed at using credit strategically. You can balance each other out and divide and conquer to make sure everything gets covered accordingly.

The information below can help you and your spouse get on the same financial page so you can move forward as a couple. If you’re having trouble – or one or both of you could use a little help eliminating the debt you brought into the marriage, we can help. Call Consolidated Credit today at or complete an online application to request a free confidential debt and budget evaluation with a certified credit counselor.

Crossing the financial threshold

These days, couples often start to come together financially even before they walk down the aisle – especially if you’ve already been living together. Still there may be some financial concerns that need to be addressed once you’re officially hitched. The tips below can help ensure you have everything in order for your new life together.

  • Change out your beneficiaries. Check life insurance policies, retirement accounts and any other plan that pays out if something happens to you to ensure your spouse is taken care of; since many of these forms will go through the HR department at your job, you can also take the time to change out your emergency contacts, too.
  • Reconcile what to do with your bank accounts. You may decide to maintain separate accounts, close your accounts to open a single joint account, or do both. In any case, both spouses should know what accounts the other has.
  • Decide how to manage your debt. Compare your credit cards to decide which ones each of you want to keep and which you may want to add an authorized user to for your spouse. You may also decide to get new joint accounts together as cosigner, but keep in mind that both of you are on the hook for the debt if it doesn’t get paid.
  • Determine what to do about tax withholding. First choose how to file – married filing jointly, married filing separately, or with one person as a dependent. You may also need to adjust your income tax withholding through your employer to decrease (or in some cases, increase) the amount taken out of each spouse’s paychecks,
  • Develop a new household budget. If you already have a budget, review it to make any necessary adjustments to your income and expenses. Also take the time to consolidate your service plans with mobile providers and entertainment accounts. This will usually cut your bills and other obligations to give you more free cash flow.
  • Set up a household saving strategy. Allocate some of your cash flow so you’re saving at least 10% of your combined net (take-home) income. If you’re working towards homeownership or you’re a new owner, increase savings to 15-20% so you have extra money to cover repairs, furniture purchases and other first-time homebuyer expenses.
  • If you don’t have life insurance, it may be time. If both of you work and one of you couldn’t pay the bills with a single income, then you need life insurance. This protects your spouse in case you aren’t around to help with the expenses.
  • Change your wills. Make sure that both of you get a living will in place to ensure your spouse and any children or step-children are protected if something happens. While you’re with a lawyer, you may also want to establish power of attorney for your spouse to handle your finances and medical decisions if you can’t.

Ensuring a happy financial home

have a happy financial household

When you first combine your financial life with your spouse or partner, don’t expect that everything is going to be perfect and run as smoothly as it did when you were on your own – two people with two perspectives and two sets of ingrained habits are usually likely to face at least some conflict or challenges when they bring their financial houses together.

Things may slip through the cracks at first or problems can arise that you didn’t expect, like overdrafts on your new joint bank account because you’re not used to two people making transactions or higher than expected credit card debt if both of you are making charges. Set your expectations so you’re prepared to keep a clear head to have a calm discussion when it happens. That way you can both make any adjustments you need to make without added tension or stress.

Make sure to sit down and decide who pays what – even if you have joint accounts, one person should be the one that goes into that account to set up bill payments every month. You also need to decide how and where money gets saved, especially if you have separate accounts. In this case, you may decide to divide savings – allocating one spouse’s savings for short-term savings, while the other covers long-term.

Of course, even once your finances are initially set up, you need to have regular conversations about money and finances. The more you talk, the more you can work together to address issues and reach your goals. Don’t keep anything secret from your spouse. It may be hard to tell your spouse you overcharged a credit card, but financial infidelity is worse if you try to hide the issue.