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Sharing your life with another is a huge commitment, full of exciting changes and challenges. But once the honeymoon is over, reality sets in—including the need to plan your financial future together.

If you've discussed how to approach your joint finances before the big day, congratulations—you're one step ahead. If you haven't, it's important to sit down and consider some options.

Merging finances

Some couples choose to combine their finances completely, closing old financial and credit card accounts and opening new, joint ones. Potential advantages include:

  • A clean slate
  • Ease of budgeting, since there are fewer accounts to keep track of
  • No delays in access to funds in emergency situations

For this strategy to work, both partners must agree on how the money is to be spent. Even the smallest expenditures may require a discussion, and frequent clashes could arise if one person is a saver and the other a spender.

Separate accounts

For those who have long managed their own money, keeping finances entirely separate may seem to be a no-brainer. However, it's not a simple solution. You'll need to determine who pays for what; for example, one spouse may be responsible for paying the rent or mortgage, while the other pays for utilities, food and insurance. Or, you could decide to split expenses and have each partner contribute his or her share.

The advantage of this approach is that both partners are free to spend their discretionary money as they wish, as long as they fulfill their agreed-upon financial responsibilities. However, this method usually works best if both partners make similar salaries. If one earns appreciably more than the other, deciding how to split expenses fairly—in half or proportionally according to income—can be a challenge.

A hybrid approach

This approach combines the merged and separate account strategies. For example, you could set up a joint account or accounts for household bills (rent, mortgage, utilities, insurance, food, etc.) and mutually agreed-upon expenses (such as vacations or entertainment). In addition, each partner would have a separate account or accounts to pay for discretionary items.

This method still poses the same challenges of who contributes how much. However, it may help foster your financial partnership while giving each of you the ability to spend some money independently.

Have "the talk"

Regardless of your approach, it's important to maintain open and honest communication. Be frank with each other about existing debt—your spouse or partner should be aware of how much you owe. Talk about future financial goals, such as buying a home, paying for college, having children and eventual retirement. If each partner has adequate information and equal input into decisions, things may go more smoothly no matter how you divvy up the cash.

As a Navy Federal member, you have access to a wide range of savings, checking and loan products to help you manage your joint and separate finances. You can also talk to a Financial Counselor to help create your strategy as you plan your new life together.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.