3 Things to Know Before Combining Finances with Your Spouse

Couple meeting with a Financial Planner

Getting married is more than a union of souls, it’s a merger of finances. While some married couples opt to keep their money in separate checking and savings accounts after their nuptials, others choose to put everything into joint accounts. Others find a compromise by maintaining some separate accounts while joining others.

There are benefits and drawbacks to each. The most important thing is to have an open, honest conversation before you say, “I do,” so that you can make the most informed financial decision for your marriage.

Here are a few things to consider before marrying your money to your spouse’s.

1. Put it all on the table. Disclose your debts and credit scores

In general, once you’re married, you only become legally responsible for your spouse’s debts on any joint accounts and on any loans in which you’ve co-signed. That means that you’re liable for a mortgage you’ve both co-signed, but not for your spouse’s credit card debt if you have maintained separate credit card accounts. (This varies by state, so be sure to check with your local state law.) If you have a joint credit card account, you are both responsible for the debt.

Similarly, your credit score won’t change if, say, you marry someone with a negative credit history. But it’s still important to know each other’s credit history. Why? When you jointly apply for any kind of loan (home, business, car, boat, personal, etc.), both credit scores will be checked during the application process. A bad credit score on either spouse could mean the loan is denied or may result in a higher interest rate. This can impact your future financial goals, like buying a house.

2. How will you manage your account?

When you combine finances with your spouse, you’ll both have access to your joint accounts, which mean you’ll both be able to make deposit and withdraw funds, pay bills, or move money between checking and savings. That can be a recipe for disaster if you’re not in sync.

Always keep in mind that you’re both responsible parties on a joint account, and any major financial decisions should be made together. First, agree to a monthly budget, long-term savings goals, and priorities like paying down debt. Then, decide who will manage the account. Knowing who’s responsible for paying bills every month will help you avoid missed payments.

Automating bill payments, and setting up direct deposits will also help make transfers easier.

3. Joint accounts? Separate accounts? New accounts?

You’ve talked over your debts, credit histories, financial goals, and you’ve discussed how you’ll manage your finances. Now you’ll have a better idea of whether you should combine accounts, keep separate accounts, or open new accounts.

Once you know which plan will work best for you, it’s time to shop around for the best interest rates, APY and the lowest fees. Always compare checking accounts and savings accounts to get the best deal and make sure you find a bank (like us!) who offers joint accounts even if you aren’t quite ready, as you can always upgrade later! Take it one step further, and find an account/bank that also has integrated budgeting tools built into their platform to help you manage your finances with ease.