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Should you merge finances when you marry?

Should you merge finances when you marry?
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If you’re wondering whether you should combine finances when you marry, you’re not alone. Money is one of the biggest issues to address when you tie the knot to avoid conflict later on.

As with many other things in marriage, there’s no one-size-fits-all when it comes to finances. Some couples do well when combining their money, while others prefer to keep things separate.

Here are some tips to help you decide the best path for you.

Discuss your options

Whether you should combine finances when you marry depends greatly on the attitudes you and your partner have towards money. If those attitudes are very different, you might need to talk about money until you reach a compromise.

There are basically three approaches to managing money after marriage:

  1. Keep everything separate, including accounts
  2. Manage everything as a couple, sharing bills, payments and money decisions
  3. Mix it up: combine part of your finances but also keep some things private

Dividing things into ‘mine, yours and ours’ is a fair compromise if you want to retain some financial independence. According to The Money Advice Service, you can have a joint account that’s used to pay all the bills, but maintain your own bank account for the rest of the money and your own expenses.

If you choose this option, you need to decide how much money each of you will put into the joint account and which bills will be paid from there.

Reasons to be cautious

No matter what option you go with, if you combine finances when you marry, there will be benefits and drawbacks. Let’s explore some of the drawbacks.

If your partner has a poor credit history and you combine finances, this could affect your credit score negatively.

There can be issues with partners contributing unequal amounts to the account, and any financial issues affect both partners if both names are on the accounts.

Having joint accounts also makes it more complicated to deal with finances if you ever choose to separate. 

Benefits of combining finances

Whether it’s partially or fully, if you choose to combine finances when you marry, you will see some benefits. Combining finances makes it easier to pay bills and handle day-to-day household expenses.

Combining lines of credit and other loans will affect the credit score of both partners. While joining finances might not be a great idea if somebody has really poor credit, it can really help if both people in the couple have at least decent scores. In this case, the numbers will only improve from then.

Combining finances also builds trust between partners and helps develop a feeling of ‘team effort’ for the couple.

Where do you start?

A joint mortgage is one of the most common ways couples combine their finances. This is because two people might qualify for a larger mortgage and a better interest rate when applying together.

If you’d rather start smaller, you can open a joint current bank account or a joint credit card, as long as you agree how these will be used.

What next?

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