Since this blog is partly about my experience with being a newlywed and now partly about personal finance, today I chose to write about how Chris and I decided to merge our finances after we got married.
A few weeks before Chris and I got married, we started to discuss how we wanted to combine our finances once we were hitched, if at all. I had never shared my money with a partner before, so this was very new for me, and to be honest, I wasn’t super excited about the thought of sharing “my” hard-earned money. As for Chris, he had a bad experience with combining finances in his previous relationship, so he knew for sure he wanted to try a different method of combining finances with me. It’s not that we didn’t trust each other, we just wanted to make sure we figured out a good, solid method for combining our finances to avoid any fights or issues pertaining to money. Because after all, financial problems are a very frequent cause of divorce.
Chris threw out an idea that he had heard on the radio: each spouse keep their own individual bank accounts, but in addition, create a joint account that’s used for the couple’s joint bills (e.g. rent, utilities, groceries, etc.). Each spouse contributes a certain amount of money to the joint account each month, while still using their own individual account for personal purchases.
So for example, every other Friday (payday), Chris and I each transfer $500 into our joint account totaling $2,000 a month, which is more than enough to cover our joint expenses. Chris makes a little more than I do, but we contribute the same amount of money every other week because Chris has me on his insurance benefits (it costs $200 to add a spouse), so it evens out. Any other money we receive as a couple goes into our joint account (e.g. money we received when we got married). If we plan a date night out or want to buy something new for our apartment, we use our joint account to pay for it. Since I’ve gotten good at tracking spending and creating budgets, I created a budget for our joint account and track our purchases from that account to make sure we don’t ever go over. At the end of the month, I’ll update Chris on our joint budget.
As for our own individual accounts, we use those to pay for our personal bills. So for me, that means my credit cards, student loans, and car payment. I can also use my personal account for buying whatever the heck I want, but Chris can’t say anything about it because the purchase was made with money from my account and vice versa. Having personal accounts is also good for when we want to buy each other gifts because the only transaction history we both have access to is for our joint account.
Finally, if one of us ever needs help financially, we of course have each other’s backs. For instance, when I was unemployed and only receiving skimpy unemployment checks as my source of income, Chris contributed $1,500 a month to our joint account and I contributed $500. There was also the time when I supported him financially while he was unemployed and receiving NO unemployment benefits at all.
Chris and I have been using this method since we got married and it’s working really well for us! I feel like we never fight about money and the bills are always covered, which is all we can really ask for. I think down the road once we’ve been married longer or start having kids, we’ll probably start transferring a larger amount into our joint account every payday or just merge everything into one account, but for now, we’ll stick to what we know works.
How did you and your spouse combine your finances after marriage? If you’re not married yet, how do you want to combine your finances with your future spouse someday?