Five Tips to Combine Finances After Marriage

• After marrying, merging finances with your spouse is no easy task, especially if you and your partner aren't used to talking about money. 
• When managing your money, you should feel financial peace, stability, and security.
• Talk to your spouse about money so that you can ensure that there will be no confusion or secrets about one another's finances. 

Combining your finances is no easy task. It requires patience, understanding, and compromise mixed with trial and error. To successfully manage your finances as newlyweds, it is important that both you and your spouse get and stay on the same page. When managing your money, you should feel financial peace, stability, and security.

Below are six tips to get you well on your way toward merging your finances with your spouse.

1. Money Conversations

The first step in combining your finances with your spouse is to have honest and transparent money conversations. Although money conversations should typically happen before marriage, starting the conversation after marriage is fine too. As long as you both start the conversation. 

When you talk to your spouse about money, you can ensure that there will be no confusion or secrets about one another's finances.

Recommended Read: Money Conversations as a Couple | Culture Meets Money with Julien & Kiersten Saunders

2. Set Money Goals

Once you have started talking about money, next should be the goal-setting stage. Setting money goals together is the roadmap to financial security. Without a map, you are sure to get lost in the shuffle.

Each spouse should write out a list of short-term and long-term goals. Your goals should be S.M.A.R.T. goals so that you and your spouse can have a straightforward guide on achieving each of them. S.M.A.R.T. goals are:

• Specific
• Measurable
• Achievable 
• Realistic 
• Timely

Short-Term Money Goal Example

Short-term money goals are something that you want to accomplish soon. Short-term goals have a time limit of being achieved next week, the next six months, or a year.

An example of a short-term goal can look like this, “We will set aside 25% each pay period to pay off our credit card debt in full within the next six months.” Another short-term financial goal example would be, “We will save $400 of our paycheck each month to put a downpayment on a new car within nine months.”

Long-Term Money Goal Example

A long-term money goal is meant to be accomplished within the next five to ten years, but it can be longer depending on the goal and time frame in which the goal should be achieved. A long-term goal may be, “We will save $555 per month for the next three years to reach our savings goal of $20,000 for a down payment on a house.”

Setting S.M.A.R.T. goals will help you to be clear about what you and your spouse want to accomplish while having a roadmap to achieve the goal. 

Consistent financial check-ins, whether it’s weekly or monthly, will help keep each other motivated. Studies show that you have a 95% chance of successfully reaching your goals with an accountability partner. 

3. Create a Budget Together

A budget is a plan for your money. Your goals should influence your monthly budget. Your budget is not meant to be perfect and will change as your marriage progresses. However, a budget will help you stay on track with your spending, savings, and money goals.

There are several budgets that can help married couples stay on track with their money and fit their style of managing their finances. A few of those budgets include: 

• Zero-Based Budget
• 50/30/20 Budget
• Line Budget
• Cash Envelope Budget

A budget isn’t supposed to feel like a financial diet. Instead, a budget can provide you with a sense of financial stability and security when you know where your money is going each month. 

Recommended Read: Build a Solid Financial Foundation with Your Partner

4. Establish Accounts

Whether you have all joint accounts or a few personal accounts for personal spending use, your spouse should know all bank accounts and what’s happening with each.

Opening Joint Bank Accounts

A joint bank account is opened by two or more people, typically a married couple or close relatives, that allow the account holders to use the funds how they see fit. Whether the account holders use the funds to pay bills or go shopping, the account holders are equally responsible for the joint account. 

If you decide to open a joint account, ask your spouse (and your spouse should ask you, too) the following questions:

• How did you see money being handled growing up?
• How do you manage your money now?
• Could we review each other's bank statements? 
• How will we use our joint account? (i.e., to pay for shared expenses or all expenses)
• What are your top spending/saving/investing/giving rules? 
• What are all your debts? (i.e., credit card, student loan, medical, etc.)
• Are you open to creating a family budget? 
• How do you feel about us having personal accounts? (i.e., a personal account can be an individual CapWay Money Account, where you contribute a percentage of your paycheck to use on personal expenses like hair and clothes shopping.) 

Take some time to think and answer the questions, then share your thoughts. There is no right or wrong answer to these questions. The point of having an honest money conversation is to get an overall idea of where your head is regarding finances. Also, ensure you respect one another’s financial views and leave out any judgment.

Share Financial Information

Keep a journal of websites with passwords to all your bank accounts and bill accounts. By sharing the financial information, you can rest assured that if your spouse were to die or be incapacitated, you could pick up where you both left off.

Recommended Read: 10 Personal Finance Basics Everyone Should Know 

5. Designate Beneficiaries

Depending on the bank account agreement and state law, your joint account may have survivorship rights. This means that if your spouse were to pass away that the funds in the account would automatically transfer to the surviving account owner. However, it’s important to designate your spouse as a beneficiary on all your accounts, including bank accounts and investment accounts. 

There are multiple benefits of having a beneficiary listed on your financial accounts, which include: 

• Your spouse has access to your money immediately should anything happen to you.
• You can avoid family fights.
• You can avoid (or simplify) the time-consuming process of probate court.
• You can choose who receives your assets (financial accounts are considered assets).

If you or your spouse don’t designate a beneficiary, and something were to happen to either of you, then your financial accounts will legally have to go through probate court (or through your estate, if you have an estate plan) before any amount of money is disbursed. This can be a grueling process, especially when a loved one is already grieving. So, it’s extremely crucial to designate a beneficiary on all accounts as soon as today. 

Recommended Read: Trust vs. Will: Differences to Note in Estate Planning

The Money Wrap-Up

Merging finances with your spouse doesn’t have to be difficult. The key is to never stop educating yourself on how to improve your financial situation. Clear communication can go a long way. Life will happen, but as long as you are open with your spouse, it makes situations easier to deal with when problems arise.