I always assumed that my now husband and I would keep our finances separate. Since I have always been very conservative with my own finances, this idea suited me just fine. I could continue to manage my money just as I wanted, and he could do the same with his. Piece of cake.
But as we got serious, the Chinese Wall between our finances got more and more impractical. The idea of merging our finances kept coming up, which tied my stomach up in knots. I worried that if we merged our finances, then I would lose my financial autonomy. I’ve always prided myself on being financially self-sufficient, and sharing finances with someone made me think that I would lose that.
We met with our financial planner, and we both shared our concerns. He talked about three main options, and not sure which one would suit us, we tried them all. Here is what we learned:
Phase 1: Keep Everything Separate
As two working professionals, this was our starting point. We split bills evenly, took turns buying dinner out and maintained our own records. This worked great in the early days, but as our relationship evolved, this started feeling more and more out of touch.
Problems: We were doubling up on the work, and frankly we got sick of having to reimburse each other for household budget items like rent and utilities. By not knowing much of what was going on in each other’s finances, we were missing out on options for managing our debts and investments most effectively.
Phase 2: It’s All Joint
When we knew our relationship was heading toward marriage, we sat down to talk about what merging our finances would look like. We first talked about what would happen if we split up (if you have a plan to merge, you need a plan to unwind, just in case). We worked with our financial planner to create a new budget system and then took the plunge. At first, this joint system worked beautifully by drastically simplifying our finances, and the transition was easier than I anticipated.
Problems: With total merging comes total transparency, as I learned the hard way. Shortly after merging, I was reviewing one of our credit card statements, and I saw a charge for my favorite spa. It turns out my husband had gotten me a birthday present, and I ruined the surprise, which made me feel awful.
Phase 3: Yours, Mine and Ours
This is what I like to think of as the Goldilocks approach and is essentially a hybrid of the two strategies above. We kept our main joint account for most of our expenses, but we also set up two separate checking accounts that are each in only one of our names. We designate a certain amount of “fun money” to go to these accounts on a monthly basis, and these accounts are totally private from each other.
Problems: Though having three accounts can seem excessive at times, this has been the best solution for us.
Every couple is different, and I have seen each of these approaches work great for different couples. Figuring out how you and your spouse both treat money can help push you toward a system that is right for you. Before deciding on an approach, make sure to sit down with your financial planner and go through each of your expectations for joint and personal spending. As long as you both are on the same page, there is no wrong approach. For us, creating a hybrid approach to our joint finances was the perfect fit—and we have not looked back since.
