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Should you combine finances when you get married?

Tristan Harrison
marriage

One of the most important things in your financial life is your partner and how you deal with money with your partner.

It’s not going to work very well if one person in the couple wants to spend every last dollar and the other wants to live in the forest and not spend a dollar.

It can be tricky knowing how to (or not to) combine your finances when you get married. You’ve spent your whole life with your own money without any input from anyone else.

I think it’s much harder for couples to collectively reach their long-term goals if you’re not working together. You’re life partners not roommates.

I don’t think it’s healthy for one person (perhaps the higher earner) to think “this is my money that I earned, I decide how to spend it”. The frame of mind should be that it’s “our” money to decide what’s important to spend it on.

I’m not saying that each person needs permission to spend every single dollar. But I believe it should be a household allocation for the bills, kids, the mortgage and so on. Sure, it would probably be a good idea to allocate a set amount of discretionary spending per person so they can choose what to spend on – you’re both grown adults who (should) know how to make good choices with money for happiness, you should be able to trust each other.

Your mortgage from National Australia Bank Ltd (ASX: NAB) (or whichever bank you are with) is probably in both of your names, you are jointly responsible. If you don’t have a mortgage then your rental agreement is probably in both of your names. I think it just makes sense to have joint finances.

Foolish takeaway

I’m sure there are marriages that have separate finances that are extremely successful, but both people would still need a long-term saving mentality. The typical couple would probably be best by combining finances, having a combined budget, having combined goals and so on. I can’t imagine there are many stories out there of couples who have polar opposite views on finances & life and yet do extremely well – communication is key.

The post Should you combine finances when you get married? appeared first on Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019