Combining Your Finances: Perks, Pitfalls, and First Steps

October 2, 2018

You’ve said your vows and cut the cake … now that you’ve tied the knot, it’s time to tie together your financial lives. Right?

Many people in long-term relationships combine finances, but why should partners do this? What are the perks? More importantly, how do couples combine finances? Read on!

Why combine finances?

The biggest perk of combining finances with your spouse or partner is convenience. As DoughRoller explains, a joint bank account means that both of you have access to the funds you need, all the time. It also makes paying for things you share easy – instead of Venmo-ing your partner for the electric bill every month, you can set up autopay from your joint account.

The Nest breaks down the other perks of fusing your finances:

Shared credit boosts: if you share a credit card and pay it off on time every month, both of your credit scores will improve over time.
Higher interest rates: when there are two of you contributing, your savings account is likely to be bigger than one person’s account. That means higher savings interest rates from financial institutions.
Tax bennies: The Nest explains, “combining finances and filing a joint tax return can result in significant savings. This is particularly true in cases where one spouse earns more income than the other.” *

Pro Tip: Put a Premium on Communication

Nearly every financial blog and resource brags on the perks of combining finances, but these recommendations come with a caveat: money issues often translate to bigger emotional issues in a relationship, so be careful and try some pre-wedding communication.

Avoid unnecessary stress by talking about your financial status early on, exploring your options, picking a plan that works for both of you, and communicating clearly about expectations and account activity, whether you’re buying a moped or a meatball sub.

Ways Couples Can Combine Finances

Option 1: Separate, but Equal

One of our millennial members talked to us about sharing finances with her husband. In their case, they keep their finances relatively separate but do share a joint account for all monthly expenses. Both partners contribute an equal share to the joint account.

You could take this approach a step further with the following breakdown:

1 shared savings account for rainy days, retirement, etc.
1 shared checking account for essential expenses
2 “fun money” accounts – these would be personal accounts with a certain amount that each person could use as they please, with no questions asked

This option provides the perks of a joint account but leaves each partner a little wiggle room. This makes purchasing secret gifts for each other, scoring Packers tickets for boys’ weekend, or snagging spa packages for girls’ weekend in Door County 100% feasible. We recommend this approach for newlyweds or those who are gun-shy about combining finances.

Option 2: Team Up

Some couples decide to combine everything – AKA, both names on all accounts. This works well for couples in which one partner handles the finances. We know lots of happy couples who divide duties evenly, and consider money matters just another one of those duties. Perhaps one spouse handles cooking and yard work, and the other handles cleaning and finances.

Option 3: One Step at a Time

The sage financial writers at Refinery29 talk about “Combining in Stages,” an approach where partners merge assets in stages (pre-debt, post-debt, pre-marriage, post-marriage). This method would be ideal for partners who have substantial debt that they would like to avoid transferring to their partner. When you consider the average college debt balance in Wisconsin, this method makes more and more sense.

Student Loan Debt Stat Via Milwaukee Journal Sentinel

How to Combine Finances

Here’s a 3-step plan for combining your finances. Of course, this is not a one-size-fits-all roadmap, so make sure to talk to your partner and a Unison Member Advisor about next steps.

Set up your joint account(s)
Move automatic debits and direct deposits to your new combined account(s)
Make sure to complete all essential account closings

When combining your accounts, it’s easiest when both partners work with the same financial institution. As Dave Ramsey explains, you can just head over with valid photo IDs and transfer money from one to the other. Otherwise, it’s easy to open new accounts and add both names to the account details.

To Combine or Not Combine … That’s the Question

Your relationship is unlike any other – no other couple has the same inside jokes, favorite movies, or taste in furniture. Why should your financial life be any different? Our Member Advisors are well-versed in the perks, pitfalls, and how-tos of combining finances, and they’re on standby to help you. Give us a jingle or start by exploring our checking and savings account options.

Thinking about spending forever together, but don’t know how to pop the question? Check out our top Wisconsin engagement spots. And, if you’re already hitched, see if your location made the list!