How To Merge Finances After Marriage: 9 Tips For Couples

To get your new family off on the right foot, it’s critically important to have a proven strategy for how to merge finances after marriage.

Unfortunately, most of the advice out there on how to combine finances after marriage tends to be one-size-fits all. It’s very hard to find moderated guidance that actually looks at the specific issues you and your spouse are having and has a nuanced discussion about the right solution to fit your needs. (I’ve discussed this idea in more detail in episodes 96 and 113 of The Money and Marriage Podcast.)

Here are nine tips for couples on how to merge finances after marriage in a way that is customized to you and your spouse’s unique money habits, attitudes and values. If you want to learn more, I encourage you to pick up a copy of my book, Marriage-Centered Money: Get on the Same Financial Page and Achieve Your Life Goals Together.

(If you’d prefer to listen to this article, you can get a podcast version of this post here:Money and Marriage Podcast Episode 131 – How To Merge Finances After Marriage: 9 Tips For Couples)

1. There is a right and wrong answer on how you should merge finances after marriage…

…but the “right” answer for you and your spouse might be the “wrong” answer for a different couple.

Financial planners and financial media personalities tend to be very quick to dole out financial prescriptions.

You can find money gurus out there who will tell you that you always need to combine 100% of your finances after you get married, and you can find equally respected gurus who will tell you never to combine any of your money with your spouse.

Beyond the obvious confusion that can result from getting such conflicting and absolute guidance, talking about how to merge finances after marriage this way leaves little room for nuance… with a topic that often as a ton of nuance in the “real world”.

To me, this is a little bit like a doctor suggesting that people should always take penicillin when they have a bacterial infection.

Sure, penicillin might make sense in many cases… but it might not be effective if the root cause of your infection is something that penicillin doesn’t effectively address. (Not to mention the fact that you might be allergic to penicillin.)

Both of those options – “you should always combine finances” and “you should always keep all your finances separate” – could be problematic for your marriage, depending on the circ*mstances. “You should always combine 100% of your bank accounts, always” sounds good in theory . . . but if you and your spouse have a few specific differences in financial habits, this one step could very easily make your financial arguments worse… unless you do some underlying work to get on the same page. And you probably don’t need me to tell you that, on the flip side, never combining any of your money can create some logistical barriers to working together in the future.

No two relationships (and no two financial situations) are exactly the same. The “right” choice for you as a family could very well be the wrong decision for others. It’s critical, then, to appropriately tailor the way you manage money as a family to the specific dynamics of your relationship.

This is a core tenet of my marriage-centered financial planning process – giving customized guidance for couples based on proven financial principles. When you’re deciding whether to combine accounts, you should first meet each other where you’re at.

Physicians don’t hand out prescriptions to patients without making a diagnosis first, and the same applies to making good money decisions for couples.

I explore this idea in a ton of detail in my book. You can grab a copy for 50% off using this link!

2. There are very, very few good reasons to keep ALL of your finances separate

All of the above being said: in the vast majority of cases, it makes sense to combine at least some financial accounts.

I’ve talked to hundreds of couples about the state of their finances and how they manage money together over the past seven plus years, and I’ve never seen a case where the optimal strategy is to keep all of their accounts separate.

There is plenty of gray area on the spectrum of “combining everything” versus “combining nothing”. I’ve seen countless cases where I thought it made sense to keep certain accounts separate rather than rush to combine them.

But usually, when I meet a couple who wants to keep everything separate, it’s a sign that they’re using completely separate finances to avoid the tough money conversations they need to have.

Separate accounts in this context are a way for them to keep their heads in the sand about their financial situations rather than addressing challenges head on.

In the best-case scenario, not wanting to combine any accounts is a sign that they don’t want to take an hour to do the necessary work to merge some of their accounts. And while I’m all about making managing money easy for couples, wanting to be so hands off with your money that you don’t want to take a little time up front to make things easier for you to manage in the long run is a bad sign about your future financial trajectory.

If you and/or your spouse has resisted the idea of combining any accounts, it’s really, really important to start exploring why this is the case. Typically, resisting the idea of combining any accounts is a symptom of an underlying issue that needs to be addressed sooner rather than later.

One final note that often gets missed by couples making the decision on how to merge finances after marriage: I’ve seen firsthand in my work with couples that keeping completely separate finances can create weird – and problematic – power imbalances in a marriage over time.

3. It is impossible to mergeall of your finances after marriage

On the flip side, it’s worth remembering that even if you want to combine literally all over your accounts…

You can’t.

Specifically, it’s impossible to combine any of your retirement accounts or Health Savings Accounts (HSAs). You might decide to combine your checking accounts, credit cards (with some caveats that we discuss below), savings accounts, and non-retirement investment accounts, but even if you wanted to combine your retirement accounts, you can’t.

Your 401(k) or 403(b) is tied to your job. Even if you and your spouse work at the same job, you’ll each have separate 401(k)s.

Have a traditional IRA or a Roth IRA? The “I” in “IRA” literally stands for “Individual”. There’s a reason you’ve never seen a Roth JRA – you can’t have a joint retirement account.

That doesn’t mean there aren’t steps to take with your 401(k)s and your IRAs when you get married. In fact, it’s the opposite – I recommend that everyone update the beneficiaries of their retirement accounts after they get married to make their spouse be the primary beneficiary of these accounts. That way, the accounts will go to your spouse if something were to happen to you.

But if you’re feeling pressure – from other people, from something inside you, or from your spouse – to combine all of your accounts, this idea should be somewhat reassuring to you.

It clearly is possible to succeed financially as a couple without literally combining all of your money… because nobody ever has. Every couple who has ever retired without getting divorced has found a way to manage their money without combining retirement accounts.

You can, too.

Which brings me to…

4. Combining goals is way, way more important than combining finances

What do you want your lives to look like as a married couple ten, twenty, fifty years from now?

I always like to start decisions about how to merge finances after marriage with your vision for the future as a couple.

Forget for a second about where your money is today – where do we want your money to take you in the future?

Then, what specific goals can you set to help make this shared vision a reality?

I find that most couples have similar visions and goals for their future. It’s one of the things that makes a couple a good long-term pair in the first place!

(And if you’re in disagreement about what your big life goals should be – you should address these differences first, before you start to worry about how to merge finances after marriage).

Once you’re in alignment on what these goals should be, then shift gears to discuss what you want your bank and investment account structure to look like to give you the easiest, clearest path to achieving these goals. Combining accounts is part of this discussion, but you should also consider the types of accounts you’re opening, whether you want to have one or more accounts to help you fund each goal, and so on.

5. Don’t assume that keeping your accounts separate will keep them safe

In a world where money is one of the primary causes of divorce, it can sometimes feel safer not to combine finances with your spouse. I’ve talked to dozens of couples over the past seven years who cite (perceived) legal benefits as a primary reason they were hesitant to combine any of their finances. Often, they’ll say something like “If we end up getting divorced, I’ll have all of my money separate to use to rebuild my life, so I feel safer keeping things separate.”

But in most states, this feeling of safety is an illusion.

Keeping financial accounts separate will typically not legally protect you in the event of a divorce unless you have a pre-nup (or post-nup). The idea that you automatically get to keep your separate accounts if you split up is a myth.

Most states require that assets be divided fairly between spouses in the event of a divorce, and this includes separate accounts.

And for a handful of states that are classified as community property states, everything you acquired during the marriage (including the separate income that goes into your separate accounts) will be treated as shared property that belongs to both of you. The starting balance of your accounts at the time of marriage might be considered your separate property, but any income or savings beyond this point is typically treated as joint property. (As of this writing, the community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.)

Whether your accounts are joint or individual, the state will require you to divide your assets according to its specified framework. Keeping your money separate won’t necessarily give you legal protection.

Rules vary by state, and if this is a concern for you, I suggest you meet with an estate planning attorney to develop a customized strategy based on the laws in your state.

6. Some accounts are easier to merge than others

I don’t necessarily mean that some accounts are easier to combine logistically than others. But in my experience talking to couples who have some reservations about how to merge finances after marriage, I’ve found that certain types of accounts can be easier for couples to decide to merge or keep separate than others.

And once again, which accounts are easier to merge versus which accounts are harder to combine can vary based on your unique money habits, attitudes, and values as a couple.

For example: I often meet with couples who are hesitant to combine checking accounts because they regularly fight about spending and saving, and they are concerned that combining accounts will shine a spotlight on these differences. (They’re right about that, by the way… unless they also put in the work to figure out how to manage a spending and savings plan that works for both of them. You can learn more about this in my book, Marriage-Centered Money.)

But, these couples are often more than willing to combine their savings accounts and their emergency funds. They’re working toward shared savings goals, after all; their hesitation about combining accounts has more to do with triggering day-to-day money fights than it does with being willing to share an emergency fund.

In cases like this, I usually recommend that couples start by combining savings accounts, and holding off on the discussion about whether they should combine checking accounts until they do the legwork needed to get them on the same page about handling their savings and spending differences.

For some couples, the exact opposite scenario is true.

For example, I worked with a couple last year where the wife (let’s call her Lisa – named changed for privacy reasons) was unwilling to combine or merge any of her financial accounts when we started working together.

After asking Lisa a few questions to try to understand her specific concerns about combining, she told me that her best friend had recently gone through a nasty divorce where the husband drained their shared bank accounts on his way out the door. (She was able to get her portion of the money back eventually, but it took time).

In the course of our conversation, Lisa realized that it wasn’t that she wasn’t willing to combine any of their finances. About 20 minutes into the conversation, she told us, “If I could just keep a $20,000 emergency fund in a separate savings account, just in case, I’d be willing to combine everything else.” Her husband agreed; they decided to keep separate emergency funds, and combine everything else. By honoring the fear that Lisa had after watching her friend struggle with her divorce, they were able to move forward and combine almost all of their finances.

(These sorts of conversations can be difficult to have, and I credit Lisa’s husband for not getting defensive at her desire to have a separate emergency fund. He recognized that Lisa’s concern was driven by her friend’s experience, not by anything to do with him. But, having this sort of awareness isn’t always easy in the heat of the moment. If you’d like help having these sorts of tough financial conversations with your partner, you can book a free breakthrough session with me at your convenience.)

There aren’t necessarily right or wrong answers about what’s easiest or hardest to combine after marriage. But if, after some reflection and discussion, you agree that certain accounts feel better to combine than others, know that this is completely normal. Don’t let black-and-white, all-or-nothing thinking hold you back; combine what you’re ready to combine, and keep working on the rest.

7. Be careful and intentional when merging credit cards after marriage

Up until this point, our discussion has primarily been focused on bank accounts and investment accounts. And while many of the principles we’ve already discussed apply to credit cards as well, there are a few unique things to consider when getting joint credit cards (or adding your spouse to an existing credit card).

Don’t close individual credit cards in most circ*mstances. If you decide to get new joint credit cards with your spouse, it can be tempting to close out your old individual credit cards.

But doing so can negatively impact your credit score. Unless your old credit card has an annual fee, I recommend keeping the old card active.

Your credit score is based on a number of factors, three of which being the average age of your credit accounts, the age of your oldest credit account, and your credit utilization (how much of your available credit balance you are using).

Closing old credit cards can negatively impact all three of these areas.

In this scenario, it’s fine to open new joint credit cards or add your spouse as an authorized user to your credit card – but you should keep your old credit cards open.

Don’t make big changes to your credit cards right before you buy a house. In general, having more available credit – and not using it – will increase your credit score in the long run. In this context, opening a new joint credit card can be a good long-term play (as long as it doesn’t lead you to overextend yourself financially, of course!)

But making changes to your credit often involves taking a step back before you take three or four steps forward. Applying for too much new credit right before you take out a big loan can lead to higher interest rates on the loan.

Even if you want to combine all of your finances, it’s not worth doing so right before you apply for a mortgage if adding new credit cards will cause a short term drop in your credit score. Instead, wait until after you take out the mortgage to make these changes.

Be aware of transparency issues with credit cards. Finally, a warning: one of the biggest issues I hear about from couples who have individual credit cards has to do with a lack of transparency or clarity around the accounts.

It can be challenging to manage your finances together if you can’t easily see the full picture of what’s going on. (This can certainly be a challenge with separate bank accounts as well, but I most commonly hear from couples about this being a challenge with credit cards).

If you decide to keep some or all of your credit cards separate – even if it’s only for a short period of time – I recommend using a financial dashboard or account aggregator so that each of you can see your full financial position at all times.

8. Your account structure should make it as easy as possible to track your progress

Whatever you decide is best for your family in how to merge finances after marriage, you should set up your accounts so that you can very easily measure your current progress.

I recommend that couples have (at least) one account for every big financial goal they have. Each goal should have a separate pool of money associated with it.

I also don’t recommend commingling accounts between goals. If you have your emergency fund, your travel fund, your house down payment savings, and your new car fund all in one savings account, it can be hard to see if you’re on track to achieve these goals (and it can be tempting to “steal” from your emergency fund to fund the other goals!)

It might feel like overkill to have separate pools of money for your separate goals, but it makes it much easier to see your progress over time.

9. These days, most couples end up on separate health insurance plans

I wrote a very detailed guide on whether couples should be on the same health insurance plan way back in November 2017, and all of the factors in this article still apply.

One thing that has changed since this article was released, though, is that I’ve noticed that for many couples, it’s actually a lot more expensive to combine health insurance plans than it used to be.

You should always check the numbers for each of your insurance plans to compare the total costs of being on each of your current plans versus staying on separate plans (or let me do it for you!) And, of course, the cost per paycheck is only one of the relevant factors to consider, as my previous article mentions.

But the trend of late is that employers will often subsidize a decent chunk of your own health insurance… but they often don’t extend the same courtesy to your spouse. I’ve seen cases where it would cost a couple three or four times the amount to be on the same health insurance than if they were on separate policies.

There are plenty of exceptions to this, so it’s important to double check. And even if it is much more expensive for you to be on the same insurance plan, there can be good reasons to do so (if one of you is self-employed, if one of you has terrible health insurance options to choose from, if one of you is out of the workforce, and so on).

But if you’re reviewing your options to merge health insurance and notice that the cost of doing so is way higher than you would expect it to be – know that you’re not alone. I’ve seen a ton of couples over the past several years decide to combine all of their finances except for their health insurance for this very reason.

Making the decision on how to merge finances after marriage is only half the battle

Once you decide on your strategy as a couple, be sure to follow through on the implementation of your plan.

Part of my job as a financial planner is to help couples follow through on their best intentions. Once you decide how you want to merge finances with your spouse, be sure to take the time to fully implement your strategy.

And once you have the financial architecture in place, it becomes even more important to have a proactive communication strategy in place to prevent money fights and make sure you each are fully in the loop on how things are going.

If you need help with any of these items, you can book a free breakthrough session with me whenever you’re ready.

How To Merge Finances After Marriage: 9 Tips For Couples - Pacesetter Planning (2024)