Getting married means a lot of changes, and making decisions about managing finances takes top priority. It’s important to decide how you will split the bills, manage your money, and save for your financial goals. There is a big difference between managing finances on your own and managing them as a couple. Suddenly, there’s another person with a say in where the money goes.
If you don’t plan together for how you’ll manage your finances, spending money could turn into arguments. Fighting and mismanaged money lead to hurt feelings and hurt finances.
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Everything You Need to Know About Managing Finances as a Couple
3 Finance Management Strategies
There isn’t a one-size-fits-all approach to managing your finances. Every couple has different situations, needs, and wants. Below are some of the top ways couples manage their money to reach their financial goals.
1. Have Two Separate Accounts
If you aren’t ready to join financial forces, don’t. It’s okay if you both maintain your individual bank accounts.
How it works:
Split the bills however you and your spouse see fit (e.g., 50/50, 30/70, etc.). Some couples split bills according to their income (i.e., the person with the larger income pays a larger percentage of the bills).
Make sure you have a solid plan so no bills get overlooked and there is clear direction regarding who pays which bill.
- You keep your debts separate (especially those you incurred before marriage).
- You don’t have to justify your spending habits.
- There’s less to argue about regarding your finances.
- One partner may feel the way the bills were split is unfair.
- You don’t know what’s going on with the other partner’s finances.
2. Have a Joint Account
If you’re ready to join financial forces, you can combine your money in one joint account. You both have access to the funds whenever you want.
How it works:
Both partners pool their funds into one shared account. You use it both to pay the bills as well as for your “fun” money. You both will have a say in how you jointly manage your money; however, be sure to delegate one person to make the bill payments to ensure all bills are paid on time and/or not double paid.
- It’s easier to track your combined finances when the money is in one place.
- It makes both couples feel equal, no matter how much either partner earns.
- It’s easier to create and meet joint financial goals.
- One partner may feel like he/she has authority over what the money goes toward.
- It’s hard to pull off surprises or gifts when you have a joint account.
3. Have Both Separate and Joint Accounts
If neither a joint account nor a separate account sounds ideal, you can have both. Having several accounts gets a little complicated, but it may be worth the extra work for your marriage.
How it works:
Both paychecks are usually deposited into the joint checking account. The joint account is the account you use to pay your bills and save for your financial goals. From this account, you can transfer a specific amount of money to each of your separate accounts for personal spending money. Together, you decide how much each partner receives, and the individual money is used how each partner wishes.
- You may feel like you have a little more control over what you spend without asking your partner’s permission.
- You know where your money stands together as well as how much you have to spend on your own personal financial goals.
- You can plan your finances together.
- Deciding how much each person receives as their “allowance” transfer into their personal account may be difficult to agree upon.
- You still need to delegate one person responsible for scheduling all of your bill payments and handling the general financial management of the joint account.
Tips For Managing Finances as a Couple
Paint a Clear Picture of Your Current Debts and Liabilities
Even though it’s a part of everyone’s life, personal finance is one of the hardest topics to discuss. Before you get married or immediately after, discuss your current debts and liabilities with each other. Be honest with your partner about what you spent and what liabilities you’re bringing to the table.
Have an open and honest discussion rather than lying or hiding your debts. It will come out eventually and will feel deceiving to your partner.
Communicate About Paying the Bills
Someone must be in charge of paying the bills. It can be one of you or both of you, but however you divvy it up, set this standard upfront.
If you’ve decided one partner will be responsible for the bills, ensure the other partner understands the money situation—don’t leave them in the dark.
If both of you will share the responsibility for paying the bills, decide which bills you’ll split and how. Do this when you both have an open mind and are willing to listen to one another. Just because you think splitting the bills one way is right doesn’t mean your partner will agree.
Keep the lines of communication open so you are both on the same page and can get support when you need it.
Figure Out How to Handle Shared Expenses
As a couple, you’ll share many expenses. How you handle them depends on how you hold your bank accounts. If you have separate accounts, you’ll likely split the bills. If you have a joint account, the money for all of the bills will come from the same place.
Shared expenses include funds for rent/mortgage, groceries, car payments, and utility bills. You use these accounts each month, so they are a necessary and consistent bill.
There are a few ways to split the bills, including:
- 50/50 split
- Split according to each person’s income (i.e., higher income means a larger percentage of the bill payments)
- Split according to each person’s usage
Have a Plan in Place if the Relationship Ends
It can get messy when couples split, especially if you combined your finances. Hopefully, if it’s an amicable split, you’ll split the money down the middle and go your separate ways.
However, if one person contributed much more financially than the other, you’ll have to come to an agreement regarding how you split your money. Keeping careful records is important, demonstrating how much money each person deposited in a savings account, for example, over time so you can split the funds fairly.
Don’t forget that, along with your bank accounts, you should also split the debts. As a couple, you’ve probably accumulated debts together. Separate the obvious debts that belong to one another, and then decide how you’ll split the remainder of your shared debts (e.g., whether down the middle or according to another percentage).
Set Financial Goals Together
Together, you should set financial goals. Each person should make a list of what’s important to them. Compare the lists to see what saving categories and goals you have in common.
You could set up funds for each of your shared goals, like a travel fund, a date night fund, a fund for a down payment on a house, and a car fund, for example. Decide how each of you will contribute to each fund to reach your goals together.
How do you manage finances as a couple?
Managing finances as a couple is an important part of any marriage. If you have tips for managing your finances as a couple, definitely share them in the comments below! Whether you have joint accounts, separate accounts, or you use a combination of the two, there is no right or wrong way. You and your partner must choose what works for you. Together, set your financial goals, determine how you’ll handle spending, and manage your finances according to an agreed-upon plan for a strong marriage that takes both partner’s ideas into consideration. Also if you have any questions about this post, don’t hesitate to reach out here on the blog or on Instagram!