How to Merge Your Finances After Marriage

Marriage is a commitment to share your lives, and in many cases, your finances, too. If you’ve lived with your spouse before marriage and already shared expenses, finances or both, combining your money after marriage may not be much of a change. If this is your first time discussing the issue, however, it can be a little overwhelming at first. Here are some tips to guide your financial discussions.

Be Honest About Your Financial Situation and Expectations

When you sit down with your spouse to discuss your finances, it’s important to be honest and transparent. Have a list of pay stubs, bank accounts, credit cards, debts (including credit card and student loan debt), retirement accounts and other assets, and ask your spouse to do the same. If you’re working to rebuild credit or pay down debt, this is a great time to discuss that, too.

Talk about your expectations for your finances. How much money do you both make now? Will you both be working? Is one of you contributing more to house cleaning or childcare? If you plan to have children in the future, what’s your ideal situation and where would you be willing to compromise? When and how do you hope to retire? What are your priorities, and what are you willing to sacrifice? The answers to these questions will guide the rest of your discussions.

Set Goals for Expenses, Debts and Savings

Once you have a clear understanding of both of your financial situations, it’s time to set short- and long-term goals. For example, if one of you has $5,000 in credit card debt at a 20 percent interest rate, you might decide to prioritize paying it down together.

Similarly, you’ll need to decide who pays which expenses, and how much. There are dozens of ways to split finances, from 50/50 on everything to paying bills from a joint account and sharing what’s left over. Choose an arrangement that feels fair to both of you—and don’t forget to revisit it periodically. For instance, if you’re planning on having a family, could one of you be the stay-at-home parent? With some planning and budgeting, it could be possible.

Finally, decide how much you’ll contribute to savings each month, including retirement contributions, investments, joint and/or separate emergency funds and special goal-oriented savings, such as for a down payment on a house or a vacation.

Make a Monthly Budget

After you’ve set your goals, make your monthly budget. List all your sources of income, including military allowances. Then compare that to your expenses, including housing, food, debt payments, insurance, savings goals, utilities, phones, transportation, entertainment and more. Remember to include any automatic deductions from your paycheck, such as for your retirement fund or for health care. It’s helpful to review your bank and credit card statements to get a better idea of how much you spend on everything, and where you can cut back to prioritize your goals. 

Once you know how much money you earn and how much you’ll need to spend each month, decide on a budgeting method and a way to track your spending. You might opt to use an app like Mint to track your expenses that alerts you both when you’re reaching your limit. Or you might decide to manually track income, expenses and earnings in a spreadsheet. 

Ideally, the method you choose should be easy to track and reference.

Get on the Same Page About ‘Fun Money’

You’ve probably heard that finances are one of the main reasons couples fight, and how you spend your “fun money” can be a major contributor. At this point, you probably have a good idea of how you both spend money and how well you both can stick to a budget.

Decide how you’ll allocate funds for “wants” instead of “needs,” and if there are any off-limits uses of that money. Will you use whatever’s left over in the joint account without keeping tabs on who spends more? Will you both take out a certain amount of cash each month? Will you each withdraw a certain amount and put it in your separate accounts? Whichever solution you choose, make sure it works for your budgeting method and your spending habits.

Consider Creating Joint Accounts, Individual or Both 

Finally, it’s time to decide which type of accounts work for you and your spouse. Some couples pool all of their money into joint accounts. Others prefer individual accounts or a combination of both. Navy Federal has great options for free checking accounts, savings accounts tailored for your goals and credit cards that can help you earn rewards or even cash back. Setting up direct deposit for your paychecks and automatic payments for recurring bills is also a good idea.

Merging finances after marriage is often an ongoing process, and there’s no one right or wrong way to do things. As your circumstances change, review your finances and make adjustments as necessary. As long as both of you are transparent and open to discussion, you’re sure to find solutions that work for you.