Combining finances as a couple can be a big decision. There are pros and cons, of course, and couples can find success on either path as long as they communicate and have clear goals and a clear plan. In this article, I share our experience with combining finances after marriage and what we have learned since.
by Christian Scully
When Brittany and I were married in 2016, we immediately decided to combine our finances, thinking that was the more logical choice for us. After nearly 5 years of marriage, and so much change along the way, we can reflect and consider how combining our finances has affected our relationship and our family.
We can definitely say that our finances and financial goals are fluid and evolve over time, quite frequently in fact. Communication is key, and regular communication is even better. There are three great results that we got from combining our finances. These may not be the same for everyone, but there are lessons you can take from each, even if you and your partner might want to keep your finances separate.
1. By combining our finances, we simplified our finances by consolidating our accounts and giving every account a purpose.
When we got married, Brittany and I each had student loans, credit cards, checking and savings accounts, investment and retirement accounts and car loans scattered around with no intention or purpose. Savings accounts, while super low in balance, were not optimized at institutions with high-yield savings accounts, or set up with any goal in mind. Retirement accounts had been set up by an employer and were charging high fees for a relatively low return. Student loans had a wide range of interest rates, none of them good, and the list goes on.
We decided that as we were starting our new life together as a team, we would reorganize all our accounts, improve interest rates and yields where we could, lower fees if possible, and discuss what our goals were going to be and arrange our accounts in line with those goals.
We each were going to now know exactly where all of our money was going and how all of our money was growing. Having accounts scattered in separate individual accounts was going to make it difficult to track and stick to a budget.
2. Combining our finances forced us to have challenging, important conversations early in our marriage.
I believe personal finance is not discussed enough in our society. It is not discussed enough at home, and is barely ever discussed in schools. Unless a person witnessed their parents being open and discussing their finances, how on earth would they know to have those conversations? I believe in privacy, but staying completely private about finances doesn't help anyone. From my experience, couples that don't openly discuss finances and get on the same page are setting themselves up for arguments and disappointment down the road.
After our wedding and deciding to combine our finances, we found ourselves figuring out how to effectively discuss our financial future together. There are going to be challenging moments! Somebody is going to be a spender, somebody is going to be stingy... the key is finding a compromise that fits on a path to a mutually desired end result. Unless one partner is already very financially savvy, both partners are going to need to learn together. If one partner is proven to be educated in personal finance, the other partner may have to humbly learn and grow their understanding for the good of the team. Both partners should be curious, ask questions and seek answers. There is so much information available between blogs, podcasts, friends and family, certified financial advisors and others.
It was not always easy, but we needed to try and be patient and find our own groove. We were able to share a vision for what our dream life would be, and then plan a path for how we could get there. Unless people think about the big picture and discuss life dreams with their partner, day to day living will get them nowhere. There is a path to making almost every dream a reality. When discussing dreams, write them down. Then organize your finances and budget in a way that puts you on the path to making your dream a reality.
3. Combining our finances both symbolically and practically unified us in our goals as a family.
We felt that as teammates, working towards achieving the lifestyle of our dreams, there was no point to specifying who's money was who's. We each started with a small sum of money and our own individual debts. When we became a team we decided those assets and debts were just considered the team's assets and debts. And every day we made a little money, and paid off a little debt, and saved a penny here and there, and did our part to lift the team up to the next level. We each have areas of strength and have naturally filled our own respective roles. But we communicate about the path we are on, and regularly gauge our progress and adjust our path accordingly.
Our interests lay in different areas, but our shared interest is our end result, financial freedom. For example, Brittany currently handles the monthly tracking of our income, expenses and budget. Most of our bills are on autopayments, but we share an interest in making sure those are paid. I have more of an interest in managing our investments and seeking new opportunities. We communicate about all of it, and know that our roles are equally as important. The big picture can't happen without the day to day, and vice versa. We stay focused as a team.
Of course that is not to say issues don't come up, they do! More discussions are needed sometimes, and compromises need to me made to find balance. It can be a challenge to stay focused on the long term sometimes and feel like you are missing out on some things in the moment. Quality of life is important, happiness is the most important. We have found that balance isn't simply achieved, it is a constant effort. Sometimes we may be so focused on the long term that it affects our short term too negatively. Other times we might become too comfortable and return to old habits, losing sight of the long term goal. Recognizing these actions and communicating about them helps keep the scale in balance over time.
No matter what you and your partner decide, to combine finances or manage them separately, communicate openly about your goals and needs. Find a solution that is manageable in the short term and brings you both closer to long term success.
+ Better Tip
The most important piece to the financial puzzle in a committed relationship is communication. Consider scheduling regular money talks with your partner to discuss goals, progress, raise any issues and work together to find solutions and compromise. Your relationship together should be the top priority, and think of your finances as a tool you can use together to reach the lifestyle and retirement goals that you share.
Finances can be super challenging to talk about! Don't expect it to be easy, but expect it to affect positive change. Consider starting off by talking about big picture goals. What does the ideal life look like? House? Cars? Kids? Retirement? Have fun dreaming together and work backwards from there. We have found that having a light at the end of the tunnel, a dream that we are working towards, puts our day to day financial grind in perspective and gives our sacrifices some important purpose.
Lastly, be sure to recognize and appreciate any changes, sacrifices or compromises your partner is willing to make. You are a team!
Christian Scully is a licensed mortgage loan originator (NMLS 1864693) in Rhode Island, Massachusetts, Maine and Connecticut and is available to help borrowers seeking to purchase or refinance a home.
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Disclaimer: The creators of Better Life and Finance are not certified financial advisors and are not attempting to give general financial advice. The information is from personal experience and shared freely. Consult a professional financial advisor when making financial decisions. Christian Scully is a licensed mortgage loan originator and is qualified to answer your home loan questions.