Merging Your Money Specifics (Printable PDF)
Accounts and other confusing topics when it comes to merging your money.
Before moving in together or tying the knot, decide how you’re going to handle your financial affairs. It’s more complicated today, but research shows that it’s a great way to invest in your relationship. You don’t have to go it alone, either: Gather information about options from your bank or financial advisor. Then make a date to discuss next steps as a couple. Consider the following questions:
- Do we want joint bank accounts?
Experts advise keeping separate personal accounts and opening a joint account for household expenses, particularly if you are a two-paycheck couple. Deciding how to spend the household money will keep you talking about how you want to handle your finances. Even if you decide to pool everything, avoid conflicts by allotting each of you a set amount to do with as you wish. You may want to put each other’s names on your separate accounts for easier access in an emergency. In any joint account, list your names as John and Jane Doe rather than John or Jane Doe to indicate that both are equally authorized as users.
- Do we want separate bank accounts?
Maintaining your own bank account and credit cards helps your individual credit ratings. It also offers a little bit of financial independence to spend some money without triggering an argument. It used to be called “mad money.” Now it’s your separate account. If you’re going to do this, both partners should have separate accounts. As a couple, discuss what purchases are considered “separate” and which are considered “joint.”
- Whose job is it?
Set up a system for paying the bills even if you choose a shared account. Bookkeeping is tidier if one spouse is in charge of the checkbook, but alternate the duty to share the responsibility and to make sure you both know how to do it. As your relationship and financial situation change, you may devise other ways of handling your joint finances, but never lose your commitment to equality in marriage.
- What is our budget?
List your monthly income and expenses. This will not only help you save money but it will help you talk about your financial priorities on an ongoing basis. There’s a worksheet in Equal from the Start that may help.
- What is my credit report? What’s yours?
Everyone has a credit report. Credit reports are used by a variety of service providers from car insurance companies to mortgage houses to your cable company. When you marry you are not only legally bound, you are also financially bound. Knowing who has “good” credit or “bad” credit can help you decide whose name to put on the lease or mortgage. Discussing your credit report can also stimulate valuable and necessary conversations about spending and saving.
- Do either of us have credit card debt?
Credit Card debt is a reality for many. Now that you’ll be legally and financially attached to someone you love and trust, you’ll want to discuss any credit card debt you may have. Debt experts[i] recommend that if one spouse has good credit and the other has damaged credit, it is important to not merge the bad with the good. To ensure that doesn’t happen, do not put your partner’s name on any of your financial accounts.
- When is the next time we’ll discuss our finances?
Remember, don’t let the conversation stop here! Keep communicating about money and finances together. Set a money date every few months to review financial achievements and goals.