On Combining Finances by jim on March 13, 2008

A few months ago I discussed the idea of combining finances when a couple gets married and this guest post by Pinyo of Moolanomy is very appropriate since my wife and I are currently on our honeymoon!

One of the last things that most couples think about before getting married is money. Unfortunately, one of the most common reasons why couples go through a divorce is also money. I have to admit that when I got married, money wasn’t the first thing on my mind — it was love. Although we each have our own financial quirks, I have to say that we are lucky to be about 99% financially compatible.

Combined Finances Is Best

For the most part our money is combined; except for our IRAs and my 401k, all of our accounts are joint. However, I don’t meddle much in our Citibank account, which was originally hers, and she still considers it hers (that’s where she deposits her paychecks). And for the most part she doesn’t meddle in our brokerage account, which was originally mine (that’s where I deposit my paychecks).

We operate semi-independently — i.e., we each pay our own bills, more or less. But the nice thing is that I can always ask her for money if I am short, or vise versa. In general, I tend to be the one who’s short on cash because I pay most of our household expenses — i.e., mortgage, property taxes, utilities, etc. (that how it was before we got married). Basically, we each have our own little financial domain, but in truth we give to each other without hesitation and without keeping track. Well it probably doesn’t matter for her, since she told me more than once that what’s hers is hers, and what’s mine is hers.

Separate Finances Is Best

As much as I want to say that the way my wife and I handle our finances is the best, I couldn’t. My parents have been married for over 30 years and they kept their finances separate. They each have their own accounts and don’t meddle in each other financial affairs. Actually, my mom doesn’t let my dad mess with her money, because she thinks he’s irresponsible. For me, his only quirk is his kindness and generosity.

So, there’s evidence to suggest that this method works too.

Which Is The Right Answer?

The answer is, I don’t know. But here are a few things that seem to help — whether you combine or separate your finances:

• Share financial information openly.
• Create and work toward common financial goals.
• Agree on basic ground rules — i.e., what each spouse can spend without consulting with each other.
• Be supportive (both financially and emotionally) when your spouse is in need.
• Don’t keep a tally, especially for little things. In fact, don’t fret the small stuff.

In the end, I don’t think there’s a single right answer, and each couple has to make it works for them. Although I do believe that the worst thing any couple can do is not talking to each other about money.

This is a guest post from Pinyo. He can be found at Moolanomy where he writes about investing, wealth building, and other personal finance topics. If you enjoyed this post, please subscribe to his RSS feed!