Should we combine our finances now that we are getting married

Dale Immekus |

Of course, my first response to this question is yes! If two people commit to spending the rest of their lives together then yes they should combine their finances. There may be exceptions to this but consider that finances are always near the top of the list in studies regarding the causes of marital strain. 

There are steps which should be taken together to make this a smooth transition prior to the nuptials. Be assured, it will be a transition when you go from a single adult solely responsible for your day to day spending decisions to being married and adding a second voice to those decisions. A voice that may not agree with your frugality or lack thereof.

First thing to determine is how you and your spouse view money, debt, savings, etc. Some people will pay a bill before the ink dries while others may procrastinate to the last minute. Working together on a budget will give both parties buy in and a greater likelihood of success. 

You may decide to keep individual accounts for spending. This is fine if the funding is coming from a surplus and not from cash flow needed to cover basic expenses or in lieu of other goals. You could give yourselves a pre-determined allowance. As long as you are both in sync, great. 

A common challenge is the amount of debt being brought into the marriage. This can be a delicate matter but absolutely must be addressed. As a financial professional I of course, would like to see the debt paid down and it is important to address this prior to marriage. If you go into a marriage with a large amount of debt, not a good idea to be sure but, it is critical to put a plan in place to manage and pay down your debt so it does not become point of contention between the two of you. Denial will only exasperate the situation.

Financial goals should be discussed and set. Short, mid-range and long term goals. A newlywed couple may be thinking of purchasing a home, replacing a vehicle, or having children; all of which costs money. Whatever your goals, prioritizing and planning together will make it easier. Communication is key.

Lack of communication also happens to be one of the most common causes of marital strain. Communicating on finances is a symptom that is easily remedied with a little effort from both parties.  Consider having a monthly finance meeting. This will help keep your budget on track, and allow you to address issues that may arise such as a cash crunch, an unusual expense or maybe some bonus money coming in and what to do with the potential surplus.  

In addition to the above, here are some to do’s: start an emergency fund; review insurance policies; access credit reports and make corrections or repairs as needed; make necessary name changes to auto titles, mortgages, and financial accounts; update beneficiaries; determine best tax filing status, update wills and power of attorneys if necessary. This is not an all-inclusive list and it may seem a daunting task but just take it one step at a time. 

Combing finances should be a positive experience in your marriage. With a little communication and planning, a newlywed couple could well be on the way to building a lasting legacy for generations to come. As always, remember to work with your team of professionals. Until we talk again, be well.

Registered Representative offering securities and advisory services through Independent Financial Group, LLC (IFG), a registered broker-dealer and investment advisor.  Member FINRA/SIPC.  Dedicated Financial & Insurance Services and IFG are unaffiliated entities.