How to Combine Finances After Marriage (4 Key Steps)

6 min read
January 31, 2023

How to Combine Finances After Marriage (4 KEY STEPS)


Are you thinking about combining finances with your spouse or soon-to-be spouse? We are going to share 4 key steps that you and your spouse can take to effectively combine your finances. These 4 steps can also help avoid money disputes and help you be on a path to achieving your common financial goals. I’m actually getting married this month so I will personally share what me and my fiancée plan to do. At the end, I’ll share a bonus tip that we tell our clients, which can lead to less fighting about money, and hopefully a happier marriage. With honest communication and a plan, you can tackle finances together as a team.


4 Steps to Combining Your Finances After Marriage

  • STEP #1: Have the Money Talk.

Discussing money may not be as romantic and fun as talking about the honeymoon, but it is important. Couples argue about finances more than any other topic so if you do the heavy lifting upfront, you will have fewer arguments and you can reap the rewards down the road. There are 3 types of money talk that you can do with your spouse: easy, hard and fun.

Easy Money Talk: This is where you write down how much you would pay for a variety of things. My fiancée and I just did this easy money exercise. Each of us filled out a sheet on how much I would pay for things such as coffee, haircut, shoes, lunch, a night out with friends, a concert ticket, and my next car.  There’s no wrong or right answer here. This exercise will help you know what your partner’s expectations are on how much to spend or not to spend on things, and vice versa.

For example, I wrote down that a woman’s haircut was $40. She explained it was more like $80. I wrote down $10 for lunch at work, she wrote down $0 because she brings her lunch.

This conversation helps set expectations, so you’re not saying to your partner: “What?! I can’t believe you spent $120 for a pair of running shoes! Or what?! You want to spend $150 to see the Washington Nationals and LA Angels play?”. This will generally lead to fewer arguments because you have already talked about it upfront.

Hard Money Talk: This involves revealing the dollar figures of your entire savings, and your entire debt. You’re going to feel vulnerable.  Even I felt vulnerable having the hard money talk with my fiancée. Do I have enough money saved? What if she has more? 

You might be thinking, will she think less of me if she knew I have $100,000 in student loan debt? However, remember, that vulnerability helps strengthen relationships. As researcher Brene Brown put it, “Vulnerability is about having the courage to show up and be seen.”

Some questions that you may want to discuss include:

– How much cash do you have in your bank account? How much have you saved for retirement?
– Do you have any student loans? Credit card debt?

Fun Money Talk: This is when you can both talk about your hopes and dreams. Individually brainstorm and list down 3 short-term goals and 3 long-term goals. These may include things such as getting out of debt, retiring early, buying a new home, or traveling more. List all of your ideas down.  Setting some goals together, writing them down, and reviewing them regularly can help you have financial success.

Again, there’s no right or wrong answer here. What do you have in common? Where are you different? Afterward, decide together as a couple on your common goals. Talk about how you can each contribute to achieving these goals. This ‘Fun Money Talk’ can increase your sense of teamwork and collaboration.

  • STEP #2: Create a Joint Budget.

Creating a joint budget is a key step in combining finances after marriage. There are three broad categories for a joint budget. These are save, give and spend. For each example below, we are going to say that your combined monthly income, after taxes, is $15,000.

  • SAVE: Think about how much of that $15,000 you’ll save towards your 2-3 common goals. 
    • If you’re both worried about retirement, you can decide how much each of you will contribute to your 401(k).
    • You may also have some short-term goals, such as saving for a trip to Europe next year, or for your electric car purchase 3 years from now. It’s important that you know how much you need to save so that you can achieve these goals.
    • For this example, let’s assume you’ll save 30% of your combined monthly income – $4,500/mo
  • GIVE: How much are you going to donate to charity or church? 
    • The average American donates around 3% of their income. You may both want to contribute more if you are in a strong financial position and your only debt is a mortgage. For this example, let’s assume that you are going to donate $1,500 per month.
  • SPEND: You’re left with $9,000 to spend. 
    • This may be spent on rent/mortgage, groceries, household expenses, entertainment, etc.  Make sure you take the time to think about all of your monthly expenses to ensure that you have enough money left to cover everything.
  • STEP #3: Create New Joint Bank Accounts.

While you don’t have to, creating a joint bank account can make it easier to combine finances after marriage. Your salaries will go to your new joint checking, and all household expenses will come out of your new joint checking. You will also want to create a new joint savings account that will house all of your joint short and long-term goals such as saving for a vacation home, or a trip to Paris.

If you don’t create a new joint checking, you can divvy up who’s going to pay for what, which is fine too. However, we think it’s much easier to manage if you use a new joint checking.

  • STEP #4: Automate.

Automate everything that you can. By setting automations and forgetting about it, you are going to be less stressed and feel much more confident that your goals are being funded. Some things that you may want to automate are: 

  • 401(k) contributions every paycheck
  • Different buckets in your savings account such as $XXX/mo towards an emergency fund, $XXX/mo towards a vacation, $XXX/mo towards a down payment for a bigger house; 

If you budgeted for your child’s college savings, you can consider opening a 529 and automating a monthly contribution.

Bonus Tip: Have a Monthly Allowance or Slush Fund

One technique to avoid money disputes between you and your partner is to give yourselves a separate monthly allowance or slush fund. Decide on an amount such as $300 per month. You can spend that on anything, you don’t have to justify it with your partner. $100 comic book. $300 spa. That’s yours to spend. This will help prevent fights about these little things. You also don’t have to feel guilty about that purchase because it’s in your budget.

Should You Combine Finances After Marriage?

One of the most significant decisions at the start of your marriage will be how you both want to manage your finances and if you want to combine everything. Getting married doesn’t mean that you are obligated to combine finances with your spouse. We generally find that it is usually easier to combine finances but there are situations where you may want to keep your finances separate. Combining finances can also mean different things to different people so it’s important to have an open conversation. It really comes down to supporting your joint values and financial goals. 

What Are Some Reasons Why We Should Keep Our Finances Separate? 

If you have very different spending habits, then it may be easier to keep your finances separate. For example, if one person is frugal with their money and the other person likes luxury items, then it may lead to more arguments having your finances combined. 

Whether you decide to keep your money separate or combined, you can always change your mind at a later stage. There is no one size fits all approach. It’s important that you and your partner are on the same page and are having open conversations about your finances. You don’t have to agree on everything but at least be honest and try to see where the other person is coming from.

Start Married Life With a Clear Path to Reach Your Financial Goals Together

With proper planning, combining your finances after marriage can help set you and your spouse up for financial success together. There is no right or wrong way to combine finances but these 4 steps will help start the conversation to decide what is best for you both.

Alvin Carlos

About the Author

Alvin Carlos is the founder of District Capital Management, an independent, fee-only financial planning firm. He helps professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money.


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