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Should Married Couples Combine Finances?

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Not by default. Married couples should do whatever it is they feel is right for them and their situation because everyone’s situation is different. For me, the answer to that question is yes. Many people always jump to the issue of trust whenever talking about combining finances because they assume that if you trust one another then you would combine your finances. If you trusted one another, you wouldn’t require a prenuptial agreement. If you trusted one another, you would have separate bank accounts and you wouldn’t draw the line so clearly.

The problem with that line of reasoning is that it’s not that simple anymore and to boil down a financial decision into an emotional one is a bad decision. There are many emotion independent reasons why you should combine finances and there are many emotion independent reasons why you shouldn’t, I’ll outline them both and then let you decide which is best.

Here are some reasons why married couples should combine their finances:

1. It’s just easier

Having two of everything is terribly inefficient. If you wouldn’t want to separate milk cartons or egg crates in the fridge, why would you want two bank accounts or two brokerage accounts? The simple fact is that dealing with one of something is much easier than two of something and you can remember one thing better than you can remember two of something, such as credit card bills. By reducing the number accounts, you simplify your life and reduce the number of potential errors.

2. Fewer accounts mean higher balances, better returns

Many banks and brokerages have low balance fees or better rates for higher balances and so there is a true financial incentive to pooling your financial resources. While some of the low balance fees are really low on a relatively scale (like $3,000 for some Vanguard funds), by pooling your finances you have a chance to get in on the investment a little bit earlier. Also, some accounts offer higher returns for larger balances. Again, you can take advantage of this earlier if you pool resources.

Here are some reasons why married couples shouldn’t combine their finances:

1. Building credit history

This is an acute problem for men and women who relied on their partner to handle the finances and then find their lives without that person due to death, divorce, or some other reason. If every bill was in one person’s name, the other person wasn’t building credit history. Now, you might say that this is only a problem if you think you’re going to get divorced but that’s not a good approach because there are any number of reasons why you would be separated, temporarily or permanently, and so both sides should be building a history.

2. Access is restricted in probate

If one spouse does die, the accounts with their name on it will likely be frozen until the courts can settle the estate. This is the second biggest reason why you should at least have some money in an account with only one spouse’s name on it – they can access it during this unfortunate time.

Those are the two biggest non-emotion/trust related reasons for both cases and I think each side has valid points. Now, as we all well know, life isn’t black and white. You don’t have to split it entirely down the middle and you don’t have to pool it all, you and your spouse can decide that you want to pool 80% and keep 20% on the side – remember, in this stage of the game, you decide what’s right for you. Thoughts?

{ 103 comments, please add your thoughts now! }

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103 Responses to “Should Married Couples Combine Finances?”

  1. Leroy Brown says:

    I’m of the school where all married couples should combine finances 100%.
    If you cannot trust your spouse completely, and that includes trusting him/her with your money, then quite frankly you have no business whatsoever being married. Trust is the foundation of any marriage, as any married ( or divorced ) person can tell you.

    Once you’re married, there’s no more “His and Hers”. Everything is “ours” , including bank accounts, retirement savings, home, cars, etc.

    • MizT says:

      If you earn “the lion’s share” of the money, and you just feel especially generous, then by all means, you should share. But I am going to tell you that I have supported a man who wouldn’t work, had my credit tied to a non-bill-payer, and had to fork over half of everything I owned in a divorce. Trust has absolutely nothing to do with it. It’s all about covering your ass-ets should something go terribly wrong. This woman learned the hard way.

    • Jim says:

      That is total nonsense… I’ve been happily married for 8 years. My wife and I have ALWAYS kept separate bank accounts because we each work, earn our own salaries, etc. We each bank with a different bank and have NO JOINT ACCOUNTS at all. Having all the money in one pile creates a LOT OF PROBLEMS and arguments over who spent what on whatever. If you separate the money, then there is NO ARGUMENT to have because I spend what is mine and she spends what is hers. We NEVER argue over money.

      The Number one reason couples get divorced is over MONEY issues so how can you say that putting everything in one pile is fair?

  2. samerwriter says:

    My wife and I combined finances a couple months after we started dating. In hindsight that was probably a bad idea, but at the time our finances consisted of a couple small checking accounts, so it really wasn’t that big of a deal.

    Come to think of it, before we got married we also bought two cars together, and 5 acres of land (on which we built our house, though we waited until after we were married for that!)

    For us it was a matter of simplicity. We knew we were getting married, and didn’t want to have to deal with two sets of accounts, credit cards, bills etc. in the interim.

    Like I said, in hindsight this was probably not a smart idea, and if I had it do over, I’d probably do things differently. If things had gone sour it might have been difficult to handle separating property. Fortunately, it all worked out :)

  3. LAMoneyGuy says:

    I am very much in favor of combining. Moreso than my Fiancee. Anyway, regarding the two reasons that you “shouldn’t”:

    1. If credit is obtained in both names, it will appear on both person’s credit reports.
    2. Not an attorney here, so verify. But the most common form of joint ownership is joint trust w/ right of survivorship. This form is known as a “will substitute” and passes to the surviving party outside of the probate process.

  4. zen says:

    We (being my wife and I) combined our accounts shortly after marriage – she was jsut graduated and job hunting at the time, and her accoutns were in a small bank near her school – I’m with a credit union. I added her to my account, and now all our finances are joint.

    I agree – trust is a big issue with it, but I wasn’t aware of the issue of dying (when my mom passed away my dad didn’t encounter any problems – I’ll have to ask) and I’ll also have to look into what LAMoneyGuy said.

  5. My Wife and I keep our money SEPERATE.

    It’s not a trust problem at all. She has access to my account, I have access to hers.

    She has her money (account) to spend on things she wants.

    I have my money to spend on things I want.

    Of course we share all the bills.

    This works out better for us. We never have arguments over money. We know where we each stand.

    Perhaps I’m in the minority here..

    - Bryan

    • Marty says:

      You may be the minority, but that makes me one too. I prefer to keep the money cut and dry and share bills so no one has any confusion over things.

    • Eirc says:

      My wife and I do the same as well. We have 3 accounts. The majority of our money goes into one to pay all the bills out of. Then I have one for spending money and she has one for spending money. That way, we don’t have to ASK if it’s okay if we buy a pair of shoes, or a CD or whatever.

      The only downside is, if I use my spending money on her, or vice versa, sometimes it feels like the other person should pay it back. I don’t like that, but I still think it is better than having to ASK if it’s okay to buy something. Of course, this is only assuming you have the money in the first place. If money is too tight, or you just flat out don’t have it, then you shouldn’t be spending anything.

  6. I’m with Bryan and keeping the money separate. It allows to save on the arguments. If she wants to go out and buy a pink inflatable elephant, I don’t have to feel like I’m funding half of it. It has nothing to do with trust.

    Looking at it another way… statistically every marriage has a 50% chance of ending in divorce (or so it is quoted). No one enters the marriage thinking they are going to be one of the 50%.

    I can’t imagine why someone wouldn’t prepare for “an emergency” that can 50% of the time?

  7. We combined our finances. We had already bought a house together before marriage (but after engagement), and once we got married and she changed her name we combined most of our accounts. We still have some accounts in our own names, but our checking account is joint and our main credit card that we put everything on is joint.

    One thing that I didn’t consider is the whole credit bit; I probably aught to change the name on some of the bills at the house to hers since everything is in my name right now.

    As for buying things and feeling like I fund half of it, that is never really an issue. We talk before making a big purchase and decide if we can afford it or not (I recently bought a $1000 home study course with some of my side-business earnings) and generally just try not to spend more than we have to. Any money that I make I consider ours, especially since she is back in school and doesn’t make any money anymore. Since we only have one income, both commute, and have new school bills and a (fairly new) mortgage to pay, its pretty easy to justify not spending money without consulting the other person.

    • bill says:

      We actually combined accounts right before we even got engaged. It made more sense for our situation we had both just finished school and we wanted to buy a home together so to organize our finances and save easily we combined. That was over 6 years ago and we have been married for 3 years now. We have 3 accounts checking, short term savings (at the same bank) and long term saving (different bank). My question to all that have both joint and seperate accounts and just seperate accounts….how do you save money long term for the future?? If the A/C goes or the roof needs replacement who’s account does that come out of?? If one person is short on cash do you barrow and pay the other person back? Who pays when you go out to dinner? I am def. a believer in joint banking

  8. Shadox says:

    Are you positive that the remaining spouse loses access to all joint accounts? What happens if there are no individual accounts in the surviving spouse’s name? Do they starve to death?

  9. jim says:

    I wrote the “frozen assets in probate” reason based on anecdotal stories people have told me before but in a brief search i found several sites that discussed this:

    “In California, typical probates last 9 months to 2 years. Assets are frozen during this period – if your family needs money to live on, they must request a living allowance from the court which may be denied.” link

    “When a will is contested the assets are frozen and they cannot be distributed until the claim is resolved.” link

    Probate just refers to when they’re settling the will and that may drag on depending on if there are any issues with it, if people contest, etc.

  10. Golbguru says:

    Jim, about “If one spouse does die, the accounts with their name on it will likely be frozen until the courts can settle the estate.” If you look hard at it, isn’t that (avoiding the “frozen” periods) one of the main reasons why people have joint accounts (combined finances)?

    As far as I know, in a joint account, if a partner dies, the account can still be operated by remaining partner….without any waiting period (or additional paper work). I would say that this is a big reason why couples should have joint accounts…not the other way round.

    As far as trust is concerned, I perfectly agree with Leroy Brown’s comment (1st comment).

  11. Easy E says:

    I’m not married myself, but I was thinking about Bryan’s comments.

    By keeping separate accounts and spending only your money on your stuff don’t you feel like your not building a life together. It seems like in that situation it would be so easy to ignore your spouses desires to focus solely on your own. After all it is your money. What if one of you wanted to go back to school, would you feel as though you were paying for her to go to school and she owes you?

    I like the idea of sharing money in a marriage because it seems to foster trust and help a relationship grow, based on what I’ve read here anyway.

    Thanks for all of the advice.

  12. dong says:

    This type of decision is always going to be very personal, and there is no one size fits all approach to it. I don’t believe it’s question of trust, but someone else might see that way. Nor do I think by having your own spending account is somehow taking away from building a life together. As always the bigger issue is about communicating well. It’s a problem if someone is sneaking funds away. It’s not a problem if someone has some kind of hobby they like to budget for independently of their partner. I don’t want my partner to feel guilty about spending her money nor do I want to feel guilty about spending money. The guilt should only be there because it’s not well budgeted, but budgeted funds should be guilt free. If I didn’t have a separate account I would be more likely to feel guilty. That’s me.

  13. Zach says:

    My wife and I keep separate finances so neither has to justify our indulgences to the other. We just divvy up the expenses and the retirement savings and go from there.

  14. Jessica says:

    We have an allowance system. All our money is joint and every week we both get an agreed amount of money deposited in our individual checking accounts. This way all our money really goes into building a life together and we have more money to use for our joint life and a set allowance that we can each spend on whatever we want.

  15. jane says:

    Since there has not been a post from a victim of “trust,” I thought it worthy of mentioning.

    I trusted my (now ex) husband completely on the day we walked down the aisle and thought it perfectly fine to combine finances. Four years later, within 24 hours, he had closed all of our accounts, cancelled all of our credit cards, served me with divorce papers, and moved in with his girlfriend. I was left with $27 dollars in my wallet and a house and toddler to support until things could get settled in court (which took 18 months).

    Ten years later, and ten light years smarter, my husband and I keep our finances separate. We share the bills and purchases of items for the house or family. The rest is ours to do with as we wish. We never argue about money, and I don’t have to live with a constant fear that my children and I will ever be “left without” again.

  16. Debt Hater says:

    I’m getting married this year and have wondered how to handle this. I think we’ll keep things separate at first until his credit score improves. After that, I think it’d be best to have a joint account for bills and expenses, separate account for personal spending money and combined retirement accounts, excluding 401k at work.

  17. credit card spy says:

    I would like to comment on the credit history issue. There is a very convenient way out – get joint accounts. Both of the account holders are responsible for all the transactions and the information goes to both holders’ credit reports.

  18. plonkee says:

    Its definitely the truth that what works for one couple won’t work for another. Its only a matter of trust to combine finances if you believe that to be so. Personally, I think more trust is required and shown were you don’t combine finances than where you do.

    In any case, in the UK, another advantage of not combining is that all tax is calculated on an individual basis. If you have to complete a tax return then it would be a lot easier if you were only dealing with your own income, investments and savings rather than splitting it between two individuals who may or may not be in the same tax-bracket. If you really trust your spouse who pays less tax than you, you can (legally) take advantage of their individual accounts to reduce your tax burden.

  19. Carl says:

    I agree. My fiancee’ and I keep our finances separate for the most part and divvy up expenses. However we have a couple ‘joint’ accounts that we use for saving for stuff we are going to buy together, like a trip or house or a couch or a dog or something we will both use and agree on. But when it comes to indulgences, its nice to have separate checking accounts, if only for the reason that each is responsible for the balance in that checking account, and will result in less (or no) overdrafts. My parents had this problem when it came to credit cards and checking accounts. My dad would be on business and load up the credit card with hotel bills and dinner out and travel expenses (all reimbursed, but it took a few weeks), and my mom would go to the grocery store and wonder why the credit card was maxed out. It’s just less painful.

  20. pf101 says:

    I’m a big supporter of Yours, Mine and Ours. In past relationships when we’ve combined finances we’ve always taken that approach. We each get a set allowance per month that we can do with as we will without discussion and without telling/showing the other person. This allowed me to buy books or go out for drinks/dinner with friends or whatever without feeling guilty. It also allowed me to buy him gifts without him seeing the bill. But, other than our personal allowances, everything else went into the pot together and we used that to pay all bills, contribute to savings and investment accounts and pay for household needs and entertainment expenses. We also had a rule that if something was being purchased for the house and cost over $100 we had to talk about it first. We both had a tendancy to splurge on art so this kept us in check a bit. It was nothing to do with trust and everything to do with us each having our own money to spend without impacting the other.

  21. Dave says:

    First my disclosure: I’m married and we have combined funds.

    The biggest reason I see on keeping things separate is spending on indulgences – as mentioned here specifically by Bryan, Lazy and Zach. I’d like to ask about the psychology behind that. Given the word choice and descriptions, items you would be buying are outside what is considered normal living expenses : books, trips, movies, whatever. … I guess my confusion is why would you have to justify the purchases? Now before people say “that’s why we have separate accounts, so we don’t justify” I’m not asking that. My curiosity focuses on why one would expect that question to be asked in the first place. Do you think that you should be putting more money into the common pot? Or maybe your SO should be helping more?

    At the same time there is a form of … separation. But that’s not the right word. Maybe deniablity is better? Effectively it’s a way to distance yourself from what you think is wrong?

    I’m just looking for insight tis why I ask. I know the limitations of my own experiences and always enjoying learning from others. In my wife and I’s case, we both have the mindset of being cheap for item’s for ourself while enjoying to treat the other. This occurred not only during dating but here and now in our first few years of marriage. So if one of us buy something there is definite cause of need.

    Another thought that I’ve had about the subject is a different take on paying bills separately. When you pay for a service yourself from personal money, it’s easy to create the thought it’s a subset of yours. If you work in a cube farm think about your computer. It’s not really yours. It’s owned by something larger. But you’ve probly generated a feeling of ownership since you use it regularly and without sharing.

    Similarly running a household, or even raising a child, is something that is bigger than either person. If all of the child’s medical bills get paid from one account instead of another does that mean they have more claim on the kid? How about paying the mortgage? Is the house yours as singular or plural?

    Given the fact that I won’t, and can’t, say what is right or wrong this is all my IMHO. To those that want their own mad money, I think the method that Jessica suggested might be the best. Give each an allowance out of the a main fund. That way it still provides the central account and goal you (plural) are working towards

    And I do want to say that what happened to Jane truly bites. I’m glad the courts were able to ‘repair’ that, its just sad it took 18 months. And I have no answer on how to either prevent that. I think it’s … the inherent weakness of being trusting of another person, be it a husband, wife, parent, heck even accountant.

  22. GeckoGirl says:

    My husband and I keep separate accounts and it has nothing to with trust. We had a joint occasion (originally established to fund our wedding) but we closed it because it complicated things. I balance my checkbook to the penny and hubby probably never balances his. Sharing an account would have created unnecessary conflict (i.e. tracking his debits because he never keeps receipts). And we both agreed it didn’t make sense to transfer money between the joint and individual accounts to pay the bills. That merely added a step to the bill paying.

    So we closed the joint account and kept our individual accounts. His name has been added to my account and vice versa. We agreed how to split the bills and how much to save (retirement and otherwise) then whatever is left, you’re are free to spend how you choose. However, neither of us makes big purchases without talking to the other. We didn’t agree to this (re the large purchases) but that’s just how things fell into place because we are one unit, regardless of how many accounts we have or how they’re labelled.

    • Marty says:

      I agree that sometimes a couple has a different way of looking at money and so that is why it is best to keep separate accounts. I am the meticulous one here and she sometimes has financial crisis’ that I don’t want to affect me. When it is time to pay the bills, we get together and pay them out of our own accounts and get the bills paid.

  23. Debbie says:

    I think it’s easier to have some accounts separate such as a checking account and credit cards as described above–so when you’re paying for things separately, you can do so safely without being perfectly up-to-date on what your spouse is spending.

    Also, if one credit card is stolen or one ATM card is blocked or you have any other kind of problem with one account, you have a back-up account. (Yes, I recommend having some of your accounts with different companies.)

    People talk about how when you get married you become one and so you should have one house, one refrigerator, one bed, one checking account. But they forget that although you are now one family, you are still two people. No one says you should have one car, one cell phone, one winter coat, or one pair of glasses.

    So I think finances fall in that grey area where it’s easier for some couples to share and easier for other couples to have division of labor.

  24. Actually the most important thing to consider is actually estate planning. Simply having a regular “I love You” will where you leave your spouse with all your assets upon death (and your spouse having a mirror will) may result in more estate taxes upon the second couple’s death than the if proper planning through a bypass trust or tax shelter trust. However, joint accounts cannot be transferred to a bypass trust. Hence, if you speak to an estate attorney and decide to set up a bypass trust, you will be told to retitle your assets so you can transfer the assets into the trust (all for the purpose of saving on estate taxes and leaving more money for your children).

  25. Eric says:

    The probate issue is a problem for separate accounts. Joint accounts generally have “right of survivorship” giving both parties 100% access to all funds even after the death of one without involvement of the probate system.

    For separate accounts you can also look into Payable on Death (POD) paperwork. This also avoids probate. Once the paperwork is signed ( and can be changed at any time ) the beneficiary just needs to show death of the account holder and prove their identity and they will give you the funds.

    So I would say it’s a wash on probate since either can avoid probate.


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