I got a question a few weeks back about what newlywed couples should do regarding their finances. What, if anything, should they combine? For a newly married couple, especially a young one, the idea of sharing someone else’s money sounds kind of exciting, but then they get to the debt and…yeah. So what should you combine? The answer is…it depends.
I’m very much a supporter of spouse unity in financial goals. Unless you have good reason not to trust your spouse with your money, I see no reason to separate this important part of your lives. As a couple, you make goals together for the future. You don’t go on separate vacations, or choose who will pay for which child’s education. And I can’t picture any couple reaching retirement age and then, wishing the other well, taking off on their own retirement journeys with their individual retirement savings. So in that same vein, I believe in making everything joint. I understand, though, that not everyone can do it.
Sadly, some couples don’t see eye to eye on finances. Some have to hide money from their spouses so they don’t blow it all. Some don’t have a credit card together because one or the other can’t control themselves. If you see these types of things before you get married and think that they’ll change once you tie the knot, here’s a reality check. These habits are just that. Habits. They aren’t going to change when you get married, or when you have less money. Or when you start having kids. It takes a lot of effort to change those. It’s possible, but it isn’t automatic.
Phew. I don’t know about you, but just thinking about all of that is overwhelming. So, what can you do to find out which way works best for you?
First off, the most important thing is that conversations take place before marriage about all this stuff. I heard of a guy who married a girl and then found out about her $40,000 in student loans. In the words of Kip Dynamite, I’d be just a little t.o.’d about that. Actually, my reaction would be a little more like this. SO! Talk about these kinds of things. Talk about your financial goals, your spending and saving habits, your thoughts about debt, etc. When the Mrs. and I were engaged, we talked about this stuff at length. And fortunately, we were very similar in our ideals. Not everyone is, though. But we’re not talking deal breaker here. If you can work it out between yourselves, that’s fine. But either way, that convo will end up saving you a lot of heartache and feelings of betrayal in the future.
We actually started mingling our finances before we were engaged. I bought the ring with cash and spent some money for a trip with her family, so I asked her for some cash so I could cover some things :) I’m actually surprised she did it. She definitely brought more money into our marriage than I did. But I imagine it was because we had already established that trust and there was no doubt in our minds that we were getting married. Well, at least my mind :) But I guess me having that money increased the incentive for her! As soon as we got married, I added her to my account, my credit card, and just about everything else, and we have shared everything since then.
So in summary, here are some important things you need to do before making the decision to combine your finances. And I know that up to this point, I’ve only addressed newlyweds. But I recommend the same steps to people who have been married longer and still haven’t done it. Here are the two important things you need before making the decision:
- Have a comprehensive conversation about your goals, habits, and beliefs about your finances.
- Talk about combining. What would be best? This is a good time to have a candid convo and really let your spouse know how you feel. Possibly hurting their feelings momentarily would be much better than fighting constantly later on.
These conversations need to be completely honest. That’s what it all boils down to: honesty and trust. If you aren’t ready for that type of conversation, you may want to hold off on the marriage thing for a while. Lots more fun conversations like that are coming your way.
If it works out, though, I see no reason not to combine assets or liabilities. You’ve chosen to be joined together legally for a reason, and it makes things loads easier.