Marriage and Money: How Couples Should Handle Combining Finances

Brian HartUncategorized

By Canon Hickman, Wealth Manager at Equity Concepts

Getting married can be one of the best decisions of your life, but few couples look forward to the inevitable conversation about money. The discussion is always the same: Is it really our money now? Who will pay the bills? Do we keep our money together or separate? How should our money be spent? Answering these questions is not easy when you’re used to doing whatever you want on your own. But successfully navigating through this topic is key if you want a healthy marriage.

In fact, according to a Utah State University study, couples that disagree once a week about finances increase their chances for divorce by more than 30 percent. Obviously, communication with your significant other is pivotal, especially when it comes to money.

To survive and thrive with your finances, there are four important conversations that every couple should have.

THE FIGHT FOR FREEDOM
Getting on the same page about how money should be spent can be a challenge for many new couples. Few realize that the fight can often be more about freedom and independence rather than money. After all, it’s easy to feel like you’re losing your sense of identity when someone else is weighing in on every decision.

To avoid putting too much pressure on your marriage early on, make sure you get on the same page about the big stuff, like how you’re going to pay the bills and how much money to put into retirement plans. Then ease into the rest. You have time – the rest of your life, actually! You don’t need to figure it all out in the first month.

TOGETHER OR SEPARATE?
No, we’re not talking about who pays the check at dinner. We’re talking about whether or not you should combine bank accounts. It can be a sticky subject as spouses battle for control, but combining bank accounts can be a great way to build trust and prove to each other that you’re on the same team.

With that said, however, many families find a way to live happily with separate bank accounts. If you struggle with joining finances, as a compromise, consider having a joint savings account for bills, emergency funds and investing but separate “spending” accounts for fun stuff you can splurge on individually. For this to work, all you need to do is decide on an appropriate amount to spend and have it auto-drafted into your “spending” accounts each paycheck. This way you stay on track without losing too much of your independence before you’re ready.

No matter what, it’s all about trust and transparency. Nobody likes to be kept in the dark, because darkness breeds doubt. Be sure to clearly communicate and share financial information with your significant other, even if certain aspects of your finances are technically separate.

THE CHOICE: FINANCIAL ADVISOR
With marriage comes an array of new faces – your spouse’s intimidating in-laws, their one crazy uncle and of course, their beloved financial advisor. When getting married, you can’t choose your family, but fortunately, you can choose your financial advisor. That being said, it is important for couples to choose only one advisor after tying the knot.

If you tend to be the financial decision maker in the relationship, consider using your spouse’s advisor. Ensuring your spouse has an advocate in the financial relationship will reassure them that their voice is being heard.

RE-THINK AND RE-BALANCE
Guess what? Life changes! Just ask any new dad who swore he wouldn’t post baby pictures on Facebook. Getting married does the same thing. Your goals can change, your account balance can change, and so can your financial plan. Getting a fresh start is key.

Take the time to reevaluate your financial plan any time there is a life event. Perhaps you married someone with children – your risk tolerance might be different now that you have more mouths to feed. Either way, it’s important to have a portfolio that reflects where you are today, not just the leftovers from your past.

In the end, there is no rulebook for newlywed couples or how to manage money. Each situation is unique. But if you are thoughtful, transparent and proactive you’ll give yourself the best chance for a happily ever after.

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About Equity Concepts: Equity Concepts is a financial services firm that provides comprehensive advice and services to individuals, families, businesses and institutions by implementing an integrated, solution driven approach to wealth management. To learn more about Equity Concepts, please visit www.equity-concepts.com. Equity Concepts is located at 2550 Gaskins Road, Henrico, VA 23238.

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/ Dealer, Member FINRA/ SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Cambridge and Equity Concepts LLC and are not affiliated.