Marriage is Two People Sharing their Lives and their Money

Money related conflicts are the most frequently cited reason for divorce. Money is the thing most couples argue about. It really is no surprise that money often divides a couple. Before a couple gets married, they have usually talked about everything except money. When they get married, they really don’t know much about each other’s views about money.

Different views of spending and saving

In a study by the American Psychological Association, 47% of respondents said they and their partner had different saving and spending habits. One partner may be an avid saver, while the other may enjoy spending on the finer things of life. The spender may feel that his or her partner is constantly nagging and cheap, while the saver may feel vulnerable to the effects of overindulging. If you are committed to your relationship, you and your partner need to have an honest conversation about your finances, spending habits, saving habits, financial goals, and anxieties about finances. Once your finances are out in the open, you can both begin working out a spending and savings plan.

Hiding Transactions from your partner

In the same study, 36% of partners in a relationship do not consult their spouse about purchases, even large purchases.  Six percent said they have secret accounts or credit cards. Hiding purchases from your partner is a form of infidelity. You need to be transparent about your finances with your spouse.

Debt needs to be repaid before real financial planning can begin

Many couples come into a marriage with financial baggage like high credit card debt or big student loans. If one partner has more debt than the other , this can become a significant issue in a marriage. Generally, debts that are brought into a marriage stay with the person that incurred them. Debts incurred after marriage are owed by both spouses.

It does not do any good to try to hide your debt from your spouse because it will eventually come out in the open. It is best to just lay all of your cards on the table , the good with the bad.

Either way, before you can really start building a nest egg together, big debts need to be paid off.  Some couples are comfortable tackling this debt together, while others prefer separate accounts to handle that debt.

Money shouldn’t be a source of power

When one partner has a paid job and the other doesn't; or when both partners would like to be working but one is unemployed; or  when one spouse earns considerably more than the other; or when one partner comes from a family that has money and the other doesn't, , the one with the most money often wants to dictate the couple's spending priorities. Money should not be used as a means to control your partner. It also shouldn’t be a measuring stick, such as “I make more than you do so I decide how we spend our money.”  Your marriage is a partnership, so each of you should share in the spending and saving decisions.

How to identify shared financial goals

Setting financial goals as a couple doesn't mean you have to give up all of your own goals. Try to find your shared vision choosing goals that make that vision a reality while also including individual goals along the way. This helps make each partner feel like an equal in the process. 

• Goals should help achieve the vision you and your spouse have for your life together. Make your goals actionable and attainable .

• Your strategy for reaching financial goals begins with the money you have left after covering the necessities. Together you should decide how to divvy up the remaining money between your discretionary spending needs and your goals.

• Set up regular "meetings" to see where you stand. At each meeting, discuss the progress you've made and reassess your financial situation.

How to share the management of your money

Trust, and positive perceptions of how the other partner is doing financially, play a huge role in whether couples decide to merge finances. Most couples pool their monies together and track it with a budget.

However, where a couple is in life also plays a role in finances. Couples who marry late in life or couples who have children from a previous marriage may not be completely comfortable merging finances completely. They may decide to set up a joint account for items that are paid jointly like mortgage, utilities etc. Then, they would keep separate accounts for those items paid solely for them such as a child’s tuition or their business expenses.

Whatever method you decide to use to manage your finances, you still need to be transparent with each other about your finances. You should plan a time to sit down together every week or couple of weeks to discuss your finances, what is coming up that you need to plan for, financial goals, and issues you are having with finances

Money is a tool that can help you both do the things in life that you want to do together.  Try to take the influence of money out of your relationship. The money you have together should be planned for, managed, budget for, and spent together.

Should You and Your Spouse have Separate Finances?

The American Dream is to find the love of your life, marry, pool everything you own as the two become one and live happily ever after. Alas, every marriage is not the American Dream. The love of you life may be a terrible money manager, owe a mountain of debt, or be a financial control freak. More and more couples are deciding that, while they love each other, joint accounts and finances are not for them.

Why Separate Finances Makes Sense for Some Couples

The rate of dual-income households has been steadily on the rise and the absence of a dedicated homemaker relieves the need to merge finances since both partners have personal streams of income. 

More people are getting married later in life, meaning by the time many settle down with a spouse, their spending habits are deeply seated and individualized. Separate accounts eliminates have to seek permission for purchases and allows for independent choice.

Many previously divorced couples opt for keeping their finances separate because they may have been burned in their previous relationship. Their Ex may have left them with no money and a pile of debt. Maintaining separate accounts provides a sense of security and harmony in the relationship.

How to Make Separate Accounts Work in a Relationship

1. Define Responsibilities. Divvy up expenses so everyone involved is aware of what they need to take care of. For example, one person may make the mortgage payment, while the other takes care of all the utilities and childcare bills.

2. Create a Bill Paying system. Agree upon an administrative system for paying joint bills. This could include, for example, picking a particular date each month to transfer a set amount into a joint account that the couple subsequently uses for those monthly joint expenses like rent, groceries, utilities, and childcare.

3. Account for differences in income. One spouse may make more money than the other, so it would be more equitable to divide your shared expenses according to a percentage of your incomes. So if one partner makes twice as much as the other, one would pay 1/3 of the shared costs while the other pays 2/3.”

4. Communication is Essential. Having separate bank accounts doesn’t mean you should feel free to buy whatever or hide financial difficulties. Don’t keep financial secrets from your spouse. Talk about any personal situations that may cause you not to be able to meet your share of the expenses. Agree to discuss any major purchase over a certain amount.

5. Monthly Check In. As a couple you will still have goals to save or invest for certain things such as a house, a big vacation etc. Additionally, you both will want the peace of mind knowing that all of the bills are paid. Sit down once a month and go over where you are in your bills and financial goals to make sure you on track.

Separate finances might provide each spouse some financial independence and may eliminate most financial arguments. Joint finances may allow each partner compete transparency and commitment to do it together. However you decide to manager you r finances, it takes a lot of up front planning and communication to get it right. The important thing is to find a system that both of you agreed upon, works for both of you, and supports a harmonious relationship.