With wedding season on the horizon, I thought it might be a good time to talk about marriage and sharing finances. There are a host of differing opinions on this subject – and for good reason. Today I’ll talk about my personal thoughts on the three main options, share some pros and cons, and share some other thoughts on marriage and money.
Completely Joint Finances
Many studies indicate that married couples do better financially when they share a bank account. Sharing a bank account can be a great thing. It encourages unity in a marriage and encourages couple to work together on money, provided they’re both willing to do that.
Having a joint bank account is great and I’m a big believer in doing so as a married couple for the reasons stated above. However, in order for joint finances to work in a marriage, the relationship has to be a healthy one where both husband and wife work together as a team.
In my own life, I’ve seen several instances where completely shared finances do NOT work. For instance, in my parents’ case, they shared all finances, but mom was not involved in management of the money at all. As a a stay-at-home mom she had no money of her own or separate bank accounts or retirement accounts. When my parents’ divorced in 1978, she had nothing to her name.
Starting over from ground zero with three kids to raise was not fun. I talk a little bit about this here. Although my father faithfully paid child support and was helpful financially in other ways at times, it was still a super rough road for my mom – and for us kids.
I’ve seen this happen dozens of times where a married couple has joint accounts but both are not active in the control of those accounts. The marriage falls apart – for whatever reason – and stay-at-home mom is screwed.
As a stay-at-home mom myself, this has always put me in a bit of a panic.I’ll explain in a bit how I’ve dealt with this fear.
Recommended Reading: Money and Marriage God’s Way
Many people choose after marriage to have completely separate finances. Having separate finances can help assure both marriage parties have access to cash and have control over some money in marriage.
However, I believe there are some risks to having completely separate finances. Number one, if your spouse is a hot financial mess, you may never know about it. If you choose to have separate finances, you might want to make sure that means totally separate finances, as in not sharing credit cards or loans either. And I think it’s important to determine why completely separate finances are important.
Are one or both spouses looking to hide something? Hide expenditures? Hide credit card debt? Are there trust issues?
I know of one couple that chose to completely separate finances after 20+ years of marriage when one spouse fell head first into a serious gambling problem. They nearly lost everything. They stayed together and said spouse recovered, but hubby decided after that to keep their monies totally separate just in case she fell into trouble again.
I think in their case that was a smart move. His reasoning for having totally separate finances was honest and true, and his intentions were good.
Joint and Separate Finances
Many married couples choose this route for their money. They have a joint checking account for the majority of their money or for bill paying needs, and separate accounts for fun money. Personally, this is what we do in our house. Because of my mom’s experience, and because I am a stay-at-home mom, I feel more secure having my own checking and savings accounts off to the side.
I’ve had more than a few friends and acquaintances end up in horrible financial places as my mom did because hubby either took all the money and left, or because he squandered it all into oblivion.
Luckily for me, Rick is great with money. We have an open book policy in our home, a spreadsheet tracking all expenditures, and a list of all liabilities, assets and investment numbers that gets updated each month. And we’re both on the same page as far as financial goals are concerned. But those years suffering financially as a child, and seeing friends suffer financially due to less-than-honorable spouses have left me a bit more….well…. a bit more aware, I guess you could say.
As such, I feel as if I owe it to myself and to my children to have separate checking and savings accounts where I can squirrel away some of my fun money each month and create a little extra security for “just in case”. It’s not about not trusting my husband so much as it is about facing the facts that things go wrong in marriage. With a 50% divorce rate in America, that is evident.
Recommended Reading: The Financial Peace Planner: A Step-by-Step Guide to Restoring Your Family’s Financial Health
How to Have a Healthy Money Relationship in Marriage
Here are some tips for having a healthy money relationship in your marriage, no matter which method of managing money you choose.
Make sure there are clear and honest discussions about money and its management before you wed.
Yep, this is NOT something you want to start talking about after the honeymoon, folks. You need to be sure you’re on the same page about money before the wedding bells ring. This means seeing each other’s credit reports and discussing money management habits, plans and expectations. You certainly don’t want to find out that your spouse is a financial disaster after you’ve married.
Make sure both parties lay all their cards on the table beforehand, and get everything out in the open.
Make a plan for managing money in marriage before you wed.
I believe it’s important to sit down and have a clear and concise talk – before you wed – about how you will manage money as a married couple. Go into detail: how much money will you each have for fun money every month? How much will be put toward retirement? What will you spend on entertainment? How do you each feel about carrying debt? These are important questions that need to be answered before the wedding day.
Make a savings plan and a retirement savings plan before you wed.
A thorough money management talk has to include a savings and retirement plan. You don’t want to find out after the wedding that your spouse has no intention whatsoever of saving money but prefers the “you only live once” spending lifestyle. Being on opposite pages regarding money management can spell huge disaster in marriage.
For more information on managing money successfully during marriage, check out this guest post called Starting Your Marriage on the Right Financial Footing, written by Matt over at Mom and Dad Money.
Which ever way you decide to manage your money as a married couple, remember that working together as a team is what matters most. Jesus tells us in the gospel of Mark that:
“But from the beginning of the creation, ‘God made them male and female. For this reason a man shall leave his father and mother and be joined to his wife, and the two shall become one flesh’; so that they are no longer two, but one flesh. Therefore what God has joined together, let not man separate.” – Mark 10:6-9
Choose together to have this attitude of “oneness” in your marriage, and you’ve given yourselves a great head start, financially and otherwise.
Great post! My husband and I do completely join checking and savings, but we both have electronic access to all of our savings and checking accounts, so we can verify everything is ok. We also have joint credit cards which I believe in as well as it ensures spending doesn’t go out of hand, so long as you monitor it frequently. My step-mom had her own credit card and had some debt on her own about 10 years ago. It scares me when a spouse can have secret credit card debt (it wasn’t exactly secret, but I think she wasn’t fully forthcoming with amount owed–now it’s paid off though) as it can affect future financial independence, especially in retirement.
I have a friend whose husband owned a dental practice and he hid some major debts of the practice from her and they had to sell their house. She did end up divorcing him, but has since had him move back in with her (after a few months of healing and forgiveness) in a house she owns in her name and he pays her rent, pays his share for vacations and expenses, and has his own car in his name only. In their church they’re still married as they live together like husband and wife (and still love each other), but she says she can’t legally marry him again after she lost her trust in him with money. If not being legally married to your spouse any longer, but still living together works financially, then do it. I was happy my friend’s marriage wasn’t totally destroyed (they had been married over 25 years when this happened) but for many people, that kind of damage is completely irreparable.
WOW, thanks for sharing some powerful stories, Tara!! Your friend’s story sounds much like the one I mentioned with the wife with the gambling problem. Those kind of financial “mishaps” can really be damaging to relationships, and I think your friend is doing it smart. At the same time, I’m so happy for you and your hubby that you can manage things well together. I think that is the ideal situation, but unfortunately we humans make mistakes and all things aren’t ideal.
A great topic Laurie. My wife and I have joint accounts, we always have. Early on we did not do a good job of sharing the responsibility of managing our money. Since we get our act together and clean up our debt we are much better at it. We communicate often, and work together. We have become a better team and it has strengthen our marriage. I wouldn’t have it any other way.
“We communicate often and work together.” SO important in marriage!! Too often that communication isn’t there and that can lead to trouble later on down the line. Thanks, Brian!
I think yes, but it is really dependent on the situation and capability. But, in our wedding, I covered the 80% of expenses and my wife and her family helped for the rest. I think it’s really fine to share finances, but the guy should shoulder the majority of it.
Thanks so much for sharing your perspective, Jayson! I appreciate it!
I’m not married, but I think I’d prefer a his/hers/ours approach. Just enough separation and togetherness to deal with everything. Great post!
Love that idea, Melanie!
Great post! We have joint finances and we wouldn’t have it any other way. We get along about money most of the time, so it works well for us.
That’s great!!! You two are great communicators about it too, which helps so much. So many couples are dealing with money fears or fights and that communication just isn’t there.
Oh to have had this article back in ’85! You will wake a lot of people up with this one Laurie. The financial sleepwalkers. I speak from experience. :
LOL, as do I!! Well, thank God we have wisdom now – at least we’ve got that going for us. 😉
Communication is key whether or not there are separate or joint finances/accounts. We have joint accounts and that works for us 🙂
Great post here, Laurie!
I do believe you should share finances, even during dating time at least you should talk about it and get to know your partner’s financial habits since it is a very important part of life and bad financial habits from your partner could bring the relationship down so it is better to know it in advance and do something about it 🙂
Agreed, Erik!!! That communication and teamwork is oh so important!
I’m not married anymore. We had joint finances when we were, however I found out he lied a lot to me. If I remarried I’d be inclined to go with separate plus joint, so all our expenses come out of the one account we both contribute to like you.
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