by Chelsea Springli 
When you get engaged it’s no longer just about you. Everything suddenly turns into “us.” After Eric and I got engaged, we moved in together and got a real-world reality check. It quickly became obvious that we needed to figure out how we were going to handle our expenses and finances as a couple. We talked about how we were going to manage our money. Did we want a joint account, separate accounts, or a bit of both? Here are some things to consider when you’re going through this process.
The Pros of Totally Combined Money
This is the route many married couples take. Having totally combined money has a lot of advantages. For starters, it encourages frequent and open communication. Many couples divorce due to money issues. By being completely open about your finances, you must be transparent, which helps build trust.
Totally combined money encourages working toward shared goals. With only one set of savings and checking accounts, it’s easier to manage your bills and how much cash you have as a couple. Working toward a shared goal can increase your intimacy in your relationship, improve your teamwork, and make your relationship more fulfilling.
The Cons of Totally Combined Money
Of course, there are some potential drawbacks to this approach especially if you’re on different wavelengths when it comes to your spending habits, which can lead to arguments. If one spouse is a saver but the other is a spender, one spouse may feel that their partner isn’t being responsible with their money. This is especially true if the two don’t make similar incomes.
Another con can be the amount of debt that each person brings into the marriage. One spouse may only have a few thousand in credit card debt, or no debt at all, while the other spouse may have several thousands in debt. This can make each spouse feel that they are have to bear the consequences of the other’s past decisions.
The Pros of Totally Separate Money
Where managing money as totally combined is equal, totally separate is completely equitable. That is, each party contributes an equitable amount to the shared bills. If someone earns a higher income, they’d contribute more towards the shared living expenses. This can be either in a shared account or just by splitting up whose name the bills are under. The advantage to keeping money separate is that it allows for each person to spend and save as they please as long as they each contribute their equitable amount to the shared bills.
A pro to keeping finances separate applies to the debt situation described earlier. If one spouse comes into the marriage with significant debt, they are the only one who has to pay for the consequences. The debt-free partner won’t be financially weighed down by the decisions of their spouse. The same is true if one partner has unhealthy spending habits or poor money management.
The Cons of Totally Separate Money
You can still work towards shared goals, but tracking them becomes a little trickier. With keeping your money separate, you may want to establish rules, particularly around the amount of savings to set aside if you are going to work towards the same goals. Will you contribute toward the goals using an equitable amount? What if the goal was one spouses idea, so they are more motivated to meet the goal than the other? Conversations like this need to happen before you start saving toward a goal so you can still work together.
Totally separate money is a missed opportunity for teamwork. While I won’t reiterate the benefits that it can have for your marriage, this missed opportunity is likely to create conflict. You or your spouse may feel that they are on their own financial journey without you, which can create emotional distance and lack of trust if not addressed.
A Bit of Both
The process of the “a bit of both” method can be very similar to the totally combined money concept. The couple pays for all the regular bills and expenses from a joint accounts that most of your money goes in to. The main difference here is that each person has a bit of extra money in their own account. It’s some fun money to maintain that sense of freedom and individuality, without the disadvantages of having totally separate money.
Many couples use this method, or something similar to it, without realizing it. When creating a budget, these couples give a “fun money” allowance to each spouse to use how they see fit each month. This money can be spent without asking or informing the other spouse first since both have already agreed to the amount when creating their budget. This “fun money” allowance may be in a separate account or just as a separate item in the budget from the shared account.
The ‘a bit of both’ method tries to make the most of the benefits of the other two methods while lessening some of the disadvantages. This method encourages teamwork and working toward shared goals without carrying the weight or guilt of larger bills.
Divide or Conquer?
No matter how you decide to manage your money, be sure to have that conversation up front. Whether you choose to totally combine your money, keep it separate, or a little of both, the key to making any method work is honesty and communication. You’ll likely slip up a time or two, but as long as you work together to bounce back, you can rebuild trust. Keep an open mind with your partner on how you both can responsibly manage your money whether it be together, separate or a little bit of both.
