Hey there! You married? Or maybe looking at getting married soon?
Although it may not be the first thing that everyone points out, marriage is a financially beneficial partnership. Few relationships have as many opportunities for two-for-one deals as a happily married couple. It’s the ultimate friends-with-benefits arrangement, literally. You get to partake of their health benefits, share auto and property insurance, and enjoy nifty tax breaks. You can share costs efficiently, and help keep each other afloat if you or your spouse need to take a step back from earning income. In the unfortunate event that things don’t work out, the law also does more to protect divorcing spouses than unmarried cohabitants (which is why we say that unmarried cohabitants should generally keep their finances separate, but that’s the next post).
For all these reasons and more, if you are legally and happily married: you should consider combining your finances.
If you’re not already with me on this, I realize the concept may sound incredibly old-school. Hear me out: when you decide to combine your finances and work toward shared priorities, the financial physics of your household go from “me-versus-you tug of war” to “two-person sled pull.” You’re pulling together with both of your resources headed in the same, mutually beneficial direction. You’re multiplying your power. And it pays off.
Part of why this is so difficult at first is also what makes it so powerful: for this to work, you need to clearly identify your shared values and priorities and figure out whether your family’s spending reflects that. Couples often fight about money when they learn that their partner’s priorities seem to differ from their own. Those fights can seem endless because the underlying issues remain unresolved.
As I’ve mentioned elsewhere, Mr. Fortuna and I didn’t combine our finances early on. In our case, it wasn’t really a conscious decision; we just drifted into it by default. We were both still drawing military paychecks, and neither of us wanted to go through the bureaucratic hassle of changing our direct deposit with the military finance office. (If you’re a veteran, you know what I’m talking about.) He was working full time then, and I was working part time. I moved in with him when we got married, so all of our major living expenses were already coming out of his account.
For awhile, that was fine.
We got closer to “joint” when we got a shared credit card, but that was when the stress really started. We’d each be making purchases, and Mr. Fortuna (as the primary breadwinner at the time) would make the payments. And he would also be thinking about the upcoming car registration fee, and how he also wanted to put aside all the money he could for savings and retirement. Meanwhile, saving wasn’t even on my radar. Most of my “fun money” purchases were coming out of my multiple (much smaller) income streams. We were young and already had some money in retirement accounts, so my past self couldn’t see what the big deal even was. (Bless her heart.)
Back then, when we fought about money, we were really fighting about priorities. Mr. Fortuna was prioritizing the future and practicality, and I was prioritizing the present and fun. Neither of us liked that our spouse seemed not to give a hoot about the things that were most important to us.
But then, we got on the same page. By figuring out how much money we actually needed to live on, and agreeing to pay off our debts and save at a set rate, we were also able to identify how much we could afford to spend on the fun stuff. In the end, we both got what we wanted.
Ok. I mean, that sounds great, but I still don’t want to do this. Maybe I have issues.
I hear you. This is not an easy mindset shift to make if you’re not already there. But, if you will, keep in mind that money-related issues come up again and again and again and again as a top source of marital conflict and a predictor of divorce. If you think you can get around it by just sticking your heads in the sand (and no judgment, that was totally us!), it’s going to come up eventually. It’s also worth remembering that money is arguably the most universally consequential legal aspect of marriage. Even if you and your spouse “don’t talk about money,” you can still be held practically and legally accountable for each other’s decisions.
So if you’re overwhelmed by icky and hard-to-define feelings, please know that most of these obstacles boil down to trust, shame, or fear. And they can all be conquered.
Trust. If you are considering marriage and you don’t trust the other person enough to talk about your big financial pictures together, you need to work that out before you get married. Marriage is a legal status very similar to a joint business venture. Although sexual exclusivity gets all the press as the defining characteristic of most marriages, you’re probably going to deal with money a bit more frequently than you make love. If you’re not married yet and you’re afraid to have this talk because your own financial history isn’t great, that news will not somehow magically be easier for your spouse to take after you get hitched. Take the time to talk about it now.
If you are already married and you feel like you need to keep separate finances because you truly don’t trust your spouse or their decisions around money, you should address that with a licensed counselor trained in working with couples, ASAP. It doesn’t mean you are wrong to feel this way, but it does mean that your marriage needs more support than a financial coach can give you. If you have told yourself that keeping things notionally “separate” is enough for now, please know that this strategy may not protect you emotionally or legally from your spouse’s financial misconduct.
Shame. If you feel like you want to keep separate finances because you feel ashamed or insecure about your money habits, or your spouse gives you a hard time about spending money, that’s not unusual. Most of us start out with money beliefs buried deep in our subconscious, and odds are really good that you and your spouse were given different money beliefs by your families of origin. And not all of these beliefs are serving you anymore.
The good news is, you can work together to rewrite any bad money myths that you might be carrying around. (And if you would like help with that, let me know!)
This is where a radical commitment to mutual respect, a solid exploration of your values, and a budget that you both agree on and stick to comes into play. As the supernaturally wise Dr. Brené Brown says: “If you put shame in a Petri dish, it needs three things to grow exponentially: secrecy, silence and judgment. If you put the same amount of shame in a Petri dish and douse it with empathy, it can’t survive.” Keeping money secrets, silence, and judgments will be toxic for you and your marriage. Treating one another with understanding and compassion as you learn to do money together will help both you and your marriage to be stronger.
Fear. If you believe that keeping separate accounts means that you are more “independent” or more “secure” in the event that something goes amiss, this might feel psychologically comforting, but it is legally not likely to be super meaningful. (Especially if you have mingled some of your money or purchases and you don’t have a prenup or a postnup.)
The treatment of marital property varies from state to state, and during marriage this may not seem to matter that much. But if you divorce or if one of you ends up on the road to bankruptcy, it can seriously undermine that perceived “independence.” These are worst-case scenarios, but short of scrupulous account-keeping on the separation of all marital property, semi-separation of your finances isn’t preserving your independence as much as you think.
Look, we have a healthy marriage and I don’t think it’s about fear or trust or shame. It just doesn’t seem fair to fully combine things because one of us earns WAY more than the other.
Tough love time: If you feel like you should keep separate finances because you have a significant earning disparity in your household and it maintains the idea of “fairness,” you both need to take a long look at what you value, in life and in each other.
If you’re both diehard egalitarian capitalists who included mentions of Adam Smith’s Invisible Hand in your wedding vows, and you are both deeply happy with a transactional relationship… then you do you, baby. I’m not gonna yuck your yum. For almost everyone else, the idea that one of you should have more say in the family’s financial decisions because you bring more money into the household is… complicated. And keeping your finances separate is a de facto guarantee that the person who earns more has more of a vote in household decisions.
I know this is just as often a problem of the lower earner feeling insecure and undeserving as the higher earner feeling superior. So I’m gonna say this real loud for the people in the cheap seats:
YOUR SALARY IS NOT A REFLECTION OF YOUR INHERENT WORTH AS A HUMAN.
If one of you earns $100K and the other earns $50K, do either of you feel like the $50K person only works half as hard in all that they do in their day-to-day life with you? Do you feel like the lower earner deserves half a vote in spending decisions? Should the lower earner get to spend half as much on their plane ticket when you go on vacation together?
What about when a spouse loses a job, or becomes disabled for any length of time, or steps back from work to be a caregiver to a child or an ill family member? When one person stops earning an income entirely, do they suddenly lose their vote in the family’s spending decisions?
Does the spouse who is doing more of the cleaning or cooking or home repairs or auto maintenance merit consideration for these uncompensated tasks?
Yes, finding an equitable answer to these questions would be “fair,” but… I don’t personally think that a healthy marriage is about making sure things are “fair.” It’s about each person agreeing to show up fully for the other person. To be there for better or worse, in sickness and in health, til death do you part.
In ten or twenty years there might be a complex algorithmic approach to settling all of this, and we will harness artificial intelligence to tell us exactly what sort of division of funds and labor would be optimally fair, but… in the absence of that, think about making the “yours” and “mine” into an “ours.” View every dollar that comes into your house as the result of your household’s combined teamwork. Pool your costs, and view them as cargo that you’ve agreed to carry together. Be radically transparent with each other about your spending decisions. Look at your joint budget as an opportunity for you to power towards your shared goals and to make sure your money shows up in the things you both value.
Once you get used to it, I think you’ll probably enjoy the fact that you’ve stopped fighting, and started winning with money together.
Ok, well, how’s that working out?
We don’t fight about money anymore. Seriously. We’re living in a fully paid-for house, saving like crazy, and able to afford a really joyful life. And while I’m not quite ready to talk about my net worth on the internet, I’ll say we’re doing a lot better than I expected to be doing at this age.
No, really, I want to know how you do it.
We did a few key things to ease the process:
- Start by creating a true combined view of your finances. Figure out where all your debts and assets and income streams live. Find all the accounts at all of the financial institutions, investment brokers, workplace retirement accounts from all the jobs you’ve had, lenders, store credit card issuers, etc.
As part of this process, both of you should pull your credit reports. Unless you’re debt-free and have a credit monitoring service or have frozen your credit, doing this every few months is good financial hygiene for everyone. You are entitled to one free copy of your credit report three times a year – one each from TransUnion, Experian, and Equifax. You can go directly to the bureaus or use annualcreditreport.com (and as of March 2022, the bureaus continue to offer free weekly online credit reports to ease the impacts of the pandemic).
This is also a great time to figure out if you have any forgotten treasures, like a pile of savings bonds in your name stuffed in the back of your parents’ safe deposit box, the retirement account from your first job that you never rolled over, or bitcoin that you may or may not have forgotten that you had.
- Agree on your ground rules up front and together. There are a lot of resources out there and plenty of them will have conflicting advice. The most important thing here is that you both are on board with the plan and you both agree to stick to it.
- Don’t start with the flexible categories – start with the major recurring and fixed expenses. The ones that didn’t happen monthly, we worked into our monthly budget too. Resources like YNAB call this the “sinking fund,” we call it “rollover money,” but either way the idea is this: you don’t have a big life insurance payment hitting you out of the blue every six months, or a big car registration fee once a year — you put a little bit aside every month so you’re ready when the bill drops. When you calculate this, you take the total amount you know you’ll need to pay and divide it by the number of months remaining until the NEXT time you make the payment. Once the payment hits, you can recalibrate the average.
Example: if you pay $600 on May 15 and November 15 (every six months) for car insurance, you would set aside an average of $100 per month, and roll it over so that when the bill pays, you have exactly $600. Then you pay the bill. But let’s say it’s March and you’re setting up your first household budget. So for now, since March + April + May are the months that you have left until that May 15 payment, you would want to budget $200 per month, so when May 15 hits you have $600 in the sinking fund. Then, when you’re setting up your June budget, you can dial it down to $100 per month and breathe easy.
These major recurring expenses are also where you’re least likely to find room for debate, so the emotional stakes are much lower and you can build your budget muscles on the easy stuff at first. But if you do find room for debate, the resolution of that can help your finances and your marriage. Like, maybe you realize that you’re overspending on your cell phone bill and you don’t even like your phone service… so you decide to find a more affordable plan that makes you both happier.
Whether you are married or cohabiting, these fixed and shared expenses are good candidates to move aside into a separate “bill-paying” checking account. We don’t currently do that because the way we use Mint’s rollover categories allows us to just build up the funds in our single joint account. But depending on how you like to manage your household’s money, a bill-paying account may be worth considering.
- FUN MONEY! Yes, I’m yelling about it. Your monthly budget should absolutely provide an equitable “fun money” allotment for each of you to spend, without criticism or complaint from your partner. This is a HUGE part of calming down money conflict. If (and only if) your marriage is otherwise healthy and has no unhealed trust breaches, it’s completely fine to give one another mutually respectful privacy. That might mean you keep your agreed-upon amount of fun money in a separate account, or take it out in cash, or buy yourself a Visa gift card. This is especially valid if you are working to outgrow the habit of making judgments (about yourself or your partner) around spending.
- Make money something you talk about regularly and consistently. Part of what happens when you combine finances is that it forces you to have discussions that need to happen inside of marriage anyway. Exercise this muscle of communication. Make it so talking about money becomes no big deal, instead of a huge stress-inducer.
I will note that this transition wasn’t always easy at first. In the early days we would often have one or maybe two
argumentssessions of really intense communication per month during a budget meeting. But then we’d reach a compromise that worked, and we’d agree to stick by our promises to each other for the rest of the month. We also got better at talking about money situations as they came up… so Mr. Fortuna wouldn’t squirrel away a windfall in our savings without talking to me, and I wouldn’t blow my bonus money at HomeGoods without talking to him.
- Transparency + integrity = trust. If you aren’t married yet, if you are new at talking about money with your partner, or if you’ve had a rocky shared financial past, now is the time to put in the work. If you have a healthy marriage — no major dishonesty, serious misgivings, or unhealed breaches of trust — I am confident that you can work through this together on your own. If you both agree to keep all your money promises to each other and keep no secrets going forward, you will build the kind of trust that will make shared finances really easy down the road.
And of course, I’d be remiss if I didn’t mention that a friendly, compassionate, supportive, and knowledgeable coach can help you with this. Book a free Big Financial Picture session to get an incredibly powerful jump-start on your combined finances journey.
[…] to my married couples: our post on married money is my best argument for why and how married people should fully combine their […]
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