Love & Money: How to Merge Your Finances

May 29, 2015

Partnering up or getting married?  How to get your money in order when you marry and merge your finances as a married couple

The last vestige of single life isn’t living alone, it’s having your own finances. Most of us have had roommates at some point. But unless you’re married or engaged, you probably haven’t had to share a bank account.  Money is one of the top reasons people get divorced, and talking about it can lead to arguments, dissent and yes, breakups.

Here are some ways to merge your bank accounts without dividing your lives:

Have the money conversation

How you spend your money reflects your values. So talking about money can be awkward, because you’re sharing what you value with someone else. It can be hard to divulge your bad habits, your debts, your family loans. If there’s a big discrepancy in salaries, it can feel awkward to bring up – whether you’re the breadwinner or being supported by your partner.

Make your money conversation a date. Get brunch or coffee and lay out your five goals and how you’d like to reach them. If you focus on the things you want to accomplish, it can be easier talking about your present.

Be honest about your current financial state and and reserve any judgment for your partner. You want to encourage openness and trust, not make someone feel bad for owing their parents money.

Create a budget together

Take a look at your past three month’s of expenses and divide them into categories. You can’t create a realistic budget without knowing what you currently spend.

Once you decide what your goals are as far as saving, retirement and other priorities, find how to incorporate them into your monthly budget. Are you both contributing at least 10% to your retirement account? Do you have an emergency fund in case something happens? If you want to go on vacation, will you have the cash to pay for it?

For my husband and I, I created separate categories for our fun money. We’re each alloted the same amount to do what we want. That way it’s accounted for in our budget and no one gets upset if the other one goes shopping.

Think about the future- both the good and the bad

Talking about money can be awkward, but not as awkward as talking about money…and death. I’ve seen people lose loved ones early in life, and while it’s depressing, you need to be prepared.

When we started our current jobs, my husband and I added each other as our beneficiaries on our life insurance and retirement policies. We talked about what kind of funeral we’d want and if we need to be kept on life support.

If you have a mortgage, you probably want to get life insurance. My husband and I considering getting some when we got engaged, but since we both had policies through work, it didn’t make sense to purchase more.

These aren’t fun conversations, but it’s important to know what your partner wants in life – and in death.

Do you need to switch insurance?

If you’re living together or getting married, it may be worth considering changing your health insurance. Some policies are better than others and you might save money by switching to your partner’s or vice versa.

Take a look at how much you’re spending currently and compare it to your partner’s plan. Make sure to take into account monthly premiums, copays and deductibles. I assumed I’d save money being on my husband’s plan, but it actually made more sense for us to have separate policies.

Amp up your emergency fund

When you put your bank accounts together, see how much you have for an emergency fund. Some of your expenses should get smaller once you merge your finances, but it’s still important to figure out how much you have in case something goes wrong.
If you don’t have any emergency fund, start by saving at least $1,000. If you don’t have any debt, save up three month’s worth of expenses (or more if your job is unstable).




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