Money and Marriage: The Good, the Bad, and the Ugly

Wedding bells are ringing, but the clink of coins in the coffer is a less joyful sound, particularly for newlyweds who haven’t thoroughly discussed their finances prior to getting married.

A marriage merges 2 hearts, 2 lifestyles, and in some cases, 2 bank accounts. Expert opinions vary on whether couples should maintain separate accounts or combine their finances. Let’s take a look at some of the pros and cons of each option.

The Joint Account

Many couples, 66%, pay their bills together, while only 34% divide the bills equally each month. In the former scenario, a couple pools their resources. Paychecks are deposited into 1 bank account, and bills and expenses are all paid from this fund.

The Good:

• You and your new spouse will have to communicate and work through issues about spending. This can help you get your priorities aligned and keep the lines of communication open.

• It’s easier. You don’t have to worry about splitting the mortgage or bills between your 2 accounts or whether your spouse is spending excessive amounts of his/her paycheck on items you might deem frivolous. Everything is out in the open.

• After you establish a budget and work out the kinks, it’s a more sustainable way to manage your money. You don’t have to plan for hidden debts or expenses, and you always know where your finances stand. You can incorporate discretionary spending for each of you into your monthly budget, so you don’t feel like you have to ask your spouse for permission to buy some new clothes or go out for lunch.

The Bad:

• He’s a spender; you’re a saver. A joint account provides total transparency, and you may not always like what you see.

• ‘My money’ suddenly becomes ‘our money.’ Someone else now has an input on every major (and sometimes even minor) financial decision. This can be difficult to adjust to.

• You’re not just merging your income; you’re also merging your debt. If your spouse has exorbitant student loans, for example, part of ‘your’ paycheck will go toward paying them off.

The Ugly:

• If you and your spouse get a joint credit card, you’re going to share any debt that your spouse racks up. Your spouse’s credit rating will have an impact on your own credit score, and you will be liable for any charges on your joint card.

• If one person has trouble following the budget, the other person may constantly feel as though he or she has to keep an eye on things. No one wants to be interrogated about every purchase, and you don’t want to have to act as the money overlord.

• Some couples fall into the trap of ‘revenge spending,’ as in, “He spent hundreds on a new guitar, so I may as well splurge on these designer shoes.” This is a no-win situation.

Separate Accounts

Some couples choose to keep their finances separate. After all, it worked throughout your relationship and engagement; why should you make a change now?

The Good:

• You don’t have to justify your purchases to your significant other. After all, you earned your money, so you should be able to spend it how you want, right?

• You don’t have to worry as much about what your spouse is doing. If he or she has a spending problem, or racks up a lot of debt, that won’t impact your credit score and creditors won’t as easily be able to seize your assets.

• A separate account allows you to maintain your own identity. You’ve worked hard to become financially independent, and separate accounts allow you to keep that independence. Plus, how could you buy surprise gifts if you can see each other’s purchases?

The Bad:

• It can get messy. How are you going to split the bills? How are you going to pay for a vacation? What if he wants to build a deck, and you think it’s unnecessary? If there’s an emergency, who will be responsible for paying for it?

• You don’t have a good idea of where you stand financially as a couple. Your spouse may not feel obligated to share his financial situation with you, so you might be worrying unnecessarily about paying bills—or you might think he/she has everything under control, when in reality, you’re barely staying afloat.

• Research shows that the more you pool your money, the happier you are with your marriage. Couples who don’t pool their money at all are the unhappiest.

The Ugly:

• When couples who keep their money separate have children, British sociologist Jan Pahl found that mothers pay for 85% of the children’s clothes and 78% of child care and school expenses, even if they are bringing in less money.

• What happens if one spouse stays home to take care of the children? Couples may disagree on how much money the stay-at-home spouse should get from the breadwinner’s paycheck.

• According to one nonprofit debt management company, 80% of spouses hide purchases, credit cards, or bank accounts, and 38% of the surveyed couples said that they were “concerned that the revelation of their secret spending would result in their spouse seeking divorce or separation if he or she were to find out.” This kind of ‘financial infidelity’ is much easier when you have separate accounts.

Whether you and your newly wedded life partner decide to have separate accounts, joint accounts, or some combination of the two is up to you. Just make sure that you’ve talked it over beforehand, and that you both have the same expectations.

Honesty and communication are essential in any marriage, and fights over money are a good predictor of divorce; in one survey, couples who reported disagreeing about finances at least once a week were over 30% more likely to get a divorce than couples who reported fewer disagreements.

Keep your lines of communication open, and don’t be afraid to adjust your finances. Many couples start out with separate accounts, but combine their assets once they have children or a mortgage.