The wedding bells rang, you’ve eaten your cake, and you’ve honeyed your moons. After the whirlwind of the wedding, normal life creeps back in, and you have a choice: how will you budget now that you’re newly married?
My husband and I switched from separate finances to joint finances when we got married. Before marriage, we split our expenses 50/50 and kept our savings and fun money completely separate. But both of us grew up in houses where our parents combined their incomes entirely and we planned to do exactly that.
…but how?
Here’s the deal. Couples continually cite finances as one of the top reasons for divorce. As you start the next chapter of your relationship, being on the same page (and practiced at having conversations) about finances will go a long way. Below, I’ve laid out three different ways newly married couples can organize their budget.
Combined Finances
As I’ve said, my husband and I chose this route. It’s a little more complicated than just opening a joint bank account, though.
Combined finances means having a combined budget, whether you’re newly married or not. Simply dumping your money in a combined account and never talking about how the money is going to be used puts you at risk of overdrawing or falling behind on long-term goals.
The first thing I would suggest is to set your budget and goals together. This means both of you know what bills need to be paid, what expenses are coming up, and how you want to spend and save.
Another suggestion I have is to set a monthly “fun money” bucket for each of you. This is your no-judgement money that you can spend on whatever you want (books, makeup, video games, the cutest stuffed animal that has ever graced your presence, etc.). This keeps anyone from feeling like their every purchase must be approved by a committee – if you want it and have the fun money, just buy it!
In order to keep budgeting from feeling constrictive, try having an agreed-upon, no-conversation max purchase price. Meaning, if you’re going to make a purchase for the household, if it’s below that amount, you can inform your spouse after the fact, rather than needing to check in beforehand.
A word of warning on combining your finances – having a conversation about shared goals and coming to a shared understanding of your resources is incredibly important. In that conversation, you should also talk about what happens if one of you loses your job, what your expectations are around supporting family, and any long-term savings goals you might have. The more you talk about these things now, the easier sharing finances will be.
But what if you’re not comfortable pooling all your resources?
Separate Finances
There are a number of reasons why couples might not combine their finances – differing spending habits, disparate debt, ex-spousal support, or even just plain not wanting to do it – but even if your bank account isn’t joint, you’re still a team, and finances should be a team sport.
I detailed possible structures for splitting household expenses in this post here, but now that you’re married, there are some additional considerations:
- What do retirement plans look like? How will you save for it, and are you comfortable with each of you potentially retiring at different times?
- How will you handle health costs? If you are on the same insurance plan, how will you manage those expenses?
- How do you handle emergency situations? How about if one partner is short on resources? What if one partner loses their job?
- What are expectations around gifts? Who pays for gifts from the couple?
In the end, as long as you are transparent about your finances and working toward shared goals, there is no reason why you HAVE to combine finances.
But some couples might find both structures useful – or neither. Then what?
Hybrid
The best part of marriage is that it’s YOUR marriage. You’re an adult, you have an adult partner, and you get to run your lives however you want. That means that what works for other couples might not work for you. Feel free to find your own way and build your own system! But I do have a couple suggestions.
Be clear on your boundaries. Having clarity about what qualifies as “yours”, “mine”, and “ours” is Step One in building your own system for managing finances. Want to buy a house together? Great! Start saving for that and see how much you can afford together. Is your partner not comfortable taking on your student debt? Do you want nothing to do with their car hobby? No problem – just be sure you talk about it! Make sure you come to an agreement that you both find fair. You are a team, after all.
All of the considerations I’ve mentioned in the combined and separate sections apply here, too – retirement, emergency situations, even simple things like joint gift-giving. Talk about them now so that it doesn’t cause a misunderstanding or fight later. And in case of an incredibly unlikely global pandemic (ha), you’ll have a plan in place to deal with it.
