The Newlywed’s Guide to Money Management

Merging the finances is one of the first big decision married couples make – and often the most difficult. For some, it feels natural to open joint checking and savings accounts and to merge all assets. It makes the couples feel as if they are taking the marriage seriously. For others, giving up their financial identity makes them nervous, so they choose to retain personal accounts after saying ‘I do“.

Every couple has their own way of handling the family assets. What’s important, however, is that the decision is made together so that both parties are comfortable with how their family’s finances are being managed.

A Full Financial Merger

Couples who decide to merge all of their assets must decide on a few ground rules. First, put somebody in charge of the bookkeeping. This person will keep an eye on the account balances, pay household bills and make sure the family spending isn’t out of control. Some couples may want to decide on a set amount of spending money each week. That way, each spouse will have control of his or her own spending habits and won’t feel guilty about a trip to the mall or a night out with friends.

A Partial Merger

A popular option is a partial merger. Many couples choose to open joint checking and savings accounts to pay household bills and save for household emergencies or big purchases, while keeping their own individual banking accounts and credit cards.

For couples who decide on this option, communication is extremely important, as no spouse should be in the dark about the other spouse’s assets. One idea is to hold each other responsible for depositing a certain amount of money into the joint accounts each week to ensure that financial goals are met. If there is money left over, each spouse is at liberty to spend, or save, as he or she chooses.

Separate Financial Identities

Couples who have had their own financial identity for years and prefer making their own financial decisions may want to keep it all separate. This is not necessarily a bad decision, as long as each spouse is informed about the family’s assets and savings. Just because each spouse is handling his or her own money doesn’t mean he or she is at liberty to hide assets and spend freely. Secrets can drive a wedge between couples and cause bigger problems in the long run, so it is important to keep the lines of communication open at all times.

The Importance of Full Financial Disclosure

Whether newlyweds decide on a full merger or a complete separation of assets is a personal decision that should be made only after an honest discussion by both individuals – preferably prior to the wedding day. Whatever is decided, it is important to make sure that both spouses talk openly with each other about their spending habits, saving habits and long term goals. Whether it be saving for a first home or buying a new car, both individuals need to know each other’s plans. Full financial disclosure will unify the couple and save a lot of arguments down the road.