3 Ways to Manage Money After Marriage

Getting married is a big decision that leads to even more decisions. Where and when to have the ceremony and who to invite are the first ones that come to mind, but the financial decisions are some of the most important, starting with whether you’ll manage your money separately or jointly. There is no right approach, so let’s look at the pros and cons of each option.

Separate accounts for independence

If you join the 23% of American couples who keep separate checking and savings accounts*, you’ll likely split your joint expenses like rent or mortgage evenly. Or, if one of you earns a lot more than the other, the higher earner may take on more of your shared costs.

Pros: You each maintain independence and control over your money, which offers protection and the freedom to save and spend as you wish. This can reduce tension and promote peace around finances. You’re also not on the hook for any debt your partner may have and it’s easier to divide assets later on if you ever need to do so.

Cons: Without visibility into your spouse’s finances, it’s difficult to budget and plan, and you could be in for surprises. Covering living expenses and larger purchases like cars can get complicated, as well. You’re either syncing individual payments or constantly transferring money back and forth. And it could be a problem in emergency situations if you don’t have access to each other’s accounts.

Tips: Maintaining separate accounts works best when you have similar values around money and financial management practices. Honesty and ongoing communication are key to keeping your finances and relationship in good shape, especially when your income or expenses change. And be sure to add each other as authorized users on your accounts in case of emergency.

Joint accounts for simplicity

Historically, the assumption was that when you got married, you combined your money into shared bank accounts. But that’s changed over the past several decades and now only about 43% of US couples have pooled their finances*.

Pros: Shared bank accounts make it easier to manage your finances. It’s less confusing to pay your bills and plan for the future when you have a clear picture of your overall financial situation. This blending of resources can bring couples together, promoting communication and trust in the relationship. And in an emergency, you both have access to your money.

Cons: For people who prize independence, the accountability and lack of privacy can be upsetting. There’s also potential for conflict if you don’t see eye-to-eye on purchases or contributions. And since it’s a shared pot of money, your finances and transactions are not private.

Tips: To achieve your financial goals, you need to be on the same page about how you’re going to save and spend money—individually and together. That involves agreeing on “ground rules” for how you’ll make financial decisions and resolve disagreements. You’ll also need to continually communicate because your finances and goals can change quickly.

Mixed accounts for the best of both worlds

To reap the benefits of joint and individual accounts, 34% of couples have a blend of both*. Typical scenarios include keeping a joint account for shared expenses like utilities, and individual accounts for personal spending like clothing. You could have your paychecks deposited directly into your joint checking account for combined expenses and split the rest into your separate accounts for personal use, or vice versa.

Pros: You get the freedom to save and spend as you wish without having to explain every transaction, and you enjoy the ease and connection of pooling your money for your mutual benefit.

Cons: You may end up having a lot of bank accounts, which means more balances to track (although that’s easier to handle if you keep all your accounts with one bank). And if something happens to your partner, you won’t be able to access their funds unless they give you power of attorney or add you as an authorized user.

Tips: It’s a good idea to build a budget so you know how much to allocate to your joint account(s) to cover your expenses, savings goals, and emergency fund. Then you can each contribute a percentage of your income to equal the necessary total. And the rest goes into your personal accounts.

Whichever approach you take as a married couple, communication is key. Ideally, the conversations start long before your wedding day. If you’re not sure where to begin, speak with an experienced banker in your community about your options.

*Survey conducted by YouGov Plc for CreditCards.com