More than a year ago, I got married. It’s fun and challenging and rewarding. I’ve learned a ton — even before the big day. One of the great challenges of any marriage is how two people merge their finances.
I wanted to share some of what I’ve learned over the last two years.
Please note that obviously all financial situations have to be specific to a couple. The real lesson is to have a serious conversation (or several) with your partner. One thing SACM and I do well together is talk openly and regularly about finances.
First, broadly, here’s what we’ve landed on: SACM and I have a joint checking/savings account and a joint credit card, however critically, we also retained personal accounts and credit cards.
This has worked well, as we’re building a joint financial future, but it allows us to have some individual freedom.
Next here are some specific lessons:
- Agree on an amount to put monthly into your joint account: We agreed on a monthly amount that we put into our joint account. That covers our monthly expenses and a little bit more to start saving. The rest we keep in our personal accounts. Right now it’s roughly half of each of our paychecks. This can be complicated if one partner is making much more than the other, however if you’re both working and able to cover expenses, I’d recommend still starting off by putting in the same amount, if possible. This can of course change later as your lives change.
- Develop goals and agree on your financial preferences: Right now, as we’re doing a lot of work on the home we purchased together, we aren’t saving as much as I might like under different circumstances. We know this. And for now, it’s the right decision, but as we look at life planning, it’s going to make sense to up how much we put into our joint account (and/or spend less) so we can meet our monthly expenses and save more for the future.
- Expect life changes: We know and expect our lives to change with time — wildly different employment situations, health or childcare, etc. So we’re open that this situation is for our right now. We’ve said that when a major life change comes, we’ll plan for and discuss how we’ve arranged things — for example, maybe we both won’t always be able to put in the same amount of money into a joint account. Maybe we’ll each be doing different things.
- Ease into it: On that point, I think we’ve taken an important but easy step (a joint account but retaining personal accounts too). That’s allowed us to have some challenging conversations but not had to complete remake our habits yet. Then we can take future steps together when they come.
- Agree on what’s a joint purchase and what’s personal: We talk about this often and openly. Primarily, if it’s something for our house or something we share (groceries, for example), we use our joint account or credit card, assuming it mostly evens out in the end. We are blessed that neither of us are particularly big spenders and have similar financial habits. This could be harder and require more conversation otherwise. However, when we do meals with our friends or get ourselves something (clothing, for example) or other things on our own, we use our personal accounts. Sometimes there are gray areas and we talk about it. With consistency and openness, you can figure it out.
- Write it down: This can feel….weird. Because partners! Fight the urge. Craft a big ol’ email with the details of what you’re agreeing to and where it’s going. It’s something to hold yourself to.
- Someone should take the lead: SACM and I are both responsible for our financial well being, as this is a major part of our future but this is something that I am clearly primarily responsible for. That means when we mess up — miss a payment, are behind in saving or need a new savings strategy — it’s my fault.
- Find the right credit card to share: Understand the difference between (the ever rarer) joint credit card and one with authorized users. We put enough research into this that my wife got interviewed about the challenge. For lots of regulatory and business reasons, there are few true joint credit cards. I thought we had one with a PNC Visa Points card, which I had personally for years, but after confusing status and a lackluster online platform, we gave up and went with the far better liked Citi Double Cash Rewards Mastercard, even though one of us had to be an authorized user. It helps that we each retain a personal card to build our credit score.