Finances in marriage

When you move in with your significant other, it’s easy to get swept up in the thrill of sharing your life with someone. With so much to enjoy and a new way of life to get accustomed to, combining finances may be one of the last things on your mind after a marriage or a move. But it’s one of the most important steps you can take to set the foundation for a strong relationship that’s based on mutual trust.

Here’s how to combine finances after moving in together.

Talk it out

Talking about money can be awkward, but combining finances requires full transparency. You need to know your partner’s current financial situation and his or her financial history, and your significant other needs to know yours. You’ll each want to lay out your:

  • Income
  • Assets
  • Loans
  • Debts
  • Credit history

These are the main points you’ll want to address, but don’t stop there. Think about what else might be important for you to know about each other’s finances: What are your spending habits? How do you prefer to pay bills?

You'll be merging your financial record with someone who has likely had both financial successes and financial missteps. Maybe you’ve had some missteps of your own. Get it all out on the table.

Decide how to share

Just as every couple is different, so are their views on how to combine finances. How you do it will depend on your preferences and those of your partner or spouse. It will also depend on each person’s income and ability to contribute. There are several ways to share your money, and there’s no right or wrong way to go about it.

One method is to open a joint checking or savings account. Both of you can contribute to the joint accounts based on a percentage of income or a set dollar amount. Either way, you’ll need to figure out how to approach everyday purchases, including groceries and toiletries, as well as the bigger purchases such as a vacation or your first home.

If you’re not comfortable combining your finances completely, you can each maintain a personal account as well. Some couples eventually pool all their finances, while others prefer the flexibility of having a set percentage of their money held jointly and the remainder held in separate accounts.

Set a budget

Pooling your finances means changing the way you think about budgeting. Work with your partner to draw up a detailed budget that'll ensure you can pay for your home, car and other essentials. Also, allow room for entertainment and the occasional luxury. You’ll also need to determine how much each of you should be able to spend before needing to consult with each other.

It’s never too early to start thinking about long-term goals, whether that means buying a home together or retiring comfortably. On the way toward those big plans, it’s a smart idea to set up an emergency fund.

Track expenses together

Combining finances is a team effort, so it’s best to both be involved in tracking expenses and staying on course. You can both keep tabs on your progress with the help of a personal finance management tool. If one of you forgets to pay a bill on time or goes over budget, at least you’ll know where you stand. Then you can work together to come up with a solution.

Keep the conversation going

Even after you’ve combined your finances, the discussion will be far from over. Make financial health a part of your regular conversation, and don’t be afraid to bring up the tough topics. Good communication is key to financial success.