SUMMARY
Discover the practical steps on how to merge finances after marriage, from setting joint financial goals to opening shared accounts and updating beneficiaries, to help couples build a strong financial future together.
Financial Planning Insights
How to Merge Finances After Marriage: A Guide for Couples
5 minute read time
Merging finances after getting married is a significant step in your relationship. It’s a process that, when approached with transparency and trust, can help couples achieve their shared goals —whether it’s buying a home, saving for a dream vacation or starting a family. Here are some key insights to help you navigate this process as smooth as possible:
Why do couples merge finances?
Couples often merge their finances to gain a clearer, more comprehensive view of their financial situation. This transparency helps them simplify their financial lives and ensures they are aligned in managing bills, reducing debt and saving for future goals. By combining finances, it may help the couple maximize savings, minimize expenses and work together towards shared financial objectives.
What are the common misconceptions of merging your finances?
While there are many benefits to merging your finances, it’s important to address some common misconceptions. The biggest misconception of merging finances is that one spouse, often a male partner, must take the lead in financial decisions. Similarly, another misconception is that merging finances leads to a loss of personal financial independence. Merging finances and starting your financial journey together is about finding a balance where both partners can contribute and benefit from a joint strategy and plan.
Tip: Keep in mind that keeping your finances separate doesn’t mean they are truly separate from a marital property standpoint, especially in states with specific community property laws. Connect with an advisor for more information.
“Typically in every relationship, there’s one Chief Financial Officer (CFO) – the person that’s handling the day-to-day bill paying and money management. However, the other spouse should have a basic understanding of what’s going on in their finances, too, especially if an emergency were to arise.”
10 Key Steps to Merging Finances After Marriage
1. Start with a Transparent Discussion
Begin by fully disclosing your financial situations to each other. Share details about your income, debt, savings and credit scores. This transparency is crucial for building trust and ensuring both of you are aligned.
Tip: Don’t forget to have a conversation with your parents, if you share any joint accounts, after discussing your plan with your spouse. You’ll want to ensure everyone is on the same page.
2. Set Joint Goals
Discuss and agree on both short- and long-term financial goals. Short-term goals might include paying off debt, saving for a vacation or establishing an emergency fund. Long-term goals could involve buying a home, saving for retirement or planning for children's education. Aligning on these goals helps in making financial decisions that benefit both partners.
3. Open Joint Accounts Together
Consider opening joint bank accounts to manage shared expenses and savings. This can be particularly useful for depositing wedding gifts or checks. Decide how you will manage these accounts and who will handle day-to-day financial tasks.
4. Update Your Beneficiaries
Update the beneficiaries on your retirement accounts, life insurance policies and any other financial accounts. Be sure to update your beneficiaries based on your new life situation and consider replacing your current beneficiary with your new spouse if appropriate.
5. Seek Professional Advice
Build a team of financial advisors to provide guidance and support. They can help you navigate complex financial decisions and ensure you both are on the right path.
“When it comes to merging finances and starting a financial plan together, having an advisor you can lean on as your lives change is huge. Change is inevitable so it’s important to be as prepared as possible and an advisor can guide you through that.”
6. Start a Joint Financial Plan
It’s essential to create a joint financial plan, with both your spouse and your advisor, that outlines your short- and long-term goals and how you’ll achieve your shared goals. This plan should be flexible and will evolve over time as your financial situation and life changes.
7. Choose Your Credit Card and Debt Strategy
Decide whether to open a joint credit card and how to manage existing debt. If you opt for a joint card, both partners will need to undergo a credit check. You should also consider whether to keep individual credit cards or close them out.
8. Build an Estate Plan
Put together a basic set of estate planning documents, including financial and healthcare power of attorney and a will. This ensures that your wishes are respected in case of unforeseen events, such as illness or death.
9. Create an Emergency Fund
Set aside an emergency fund to cover unexpected expenses. Aim for three to six months' worth of living expenses. This fund can provide a financial buffer and reduce stress in case of job loss, medical emergencies or other unforeseen events.
10. Set Up Financial Check-In Meetings
Establish a routine to review your financial situation together. This could be a weekly or monthly meeting to discuss expenses, savings and progress towards your goals. Having these regular check-ins help maintain open communication and ensure you’re aligned.
Merging finances after marriage is a process that requires transparency, open communication and mutual understanding. By setting following these steps, you can support each other's financial journey and build a secure future together.
Looking for personalized advice as you step into this next chapter together? Reach out to your advisor or connect with one today.