How to Merge Your Finances - Part One: Your Daily Bank Accounts

Marriage and money can be an extremely emotional mix. As I’ve been writing about the topic for over ten years, I’ve seen couples both struggle with how handling their money as well as achieve fantastic goals together.

The key difference was how they viewed and approached their finances. Having these two crucial things in place can allow you two to become an unstoppable team as you merge your finances.

I covered the high-level conversations to get the ball rolling on creating a basic plan together.

Today I want to go into mechanics of merging finances. How you can set up your most-used accounts - your checking and savings - so you’re hitting your big money goals! 

Banking Together: Joint, Separate, or a Hybrid?

Managing your day to day expenses is crucial. We all have to pay the bills, stash away something aside for emergencies plus future goals, and have some money to enjoy now.

The two components to making everything go smoothly is creating a budget or spending plan and having your accounts set up to follow through.

The heavy hitters in this department for most people are their checking and savings accounts. Your paychecks are depositing and then dispersed to the bills, savings, investments, etc.

While you can create whatever system of accounts you want, there are basically three main paths couples take when it comes to their money - go all in, keep separate accounts, and a hybrid.

To figure out which one is right for you, I want to cover them along with some benefits.

All in One Pot

Many couples choose to have all their money go into joint checking and savings.

By combining their money into one pot, so to speak, it can be easier for them to schedule bill payments and transfers from a central location. It can also allow either one of them to step in and take care of things.

Another benefit is that there is more transparency, you both know what’s going on and can see the balances at any time.

Finally having shared accounts can gently nudge you to communicate more. Since you can immediately see the purchases, you can address any questions or concerns that you have right away.

Keeping Things Separate

Recently Broke Millennial creator Erin Lowry reached out to couples to see how they handled their finances and for some partners keeping things separate worked for them.

Both split and pay the bills, but from their individual accounts.

It can be a way to ease into merging finances down the road, but others feel like this method gives them an opportunity to spend as they see fit while still working together on the big goals.

I do want to note that if there is a big difference between your salaries that a fair way to divide the bills is by approaching proportionally.

Let’s say one of you takes home $5,000 and the other brings in $3,000. Between the two of you, your monthly bills and expenses are $4,000.

Instead of you going the 50/50 route where you each put in $2,000, the higher earner would chip in $2,480 while the other pays $1,520.

This can seem more equitable because you’re both contributing but on the same scale, not leaving one spouse in a financially insecure spot.

Mixing It Up

We actually use this approach with our own finances. While the vast majority of our money goes into our joint check and savings, we each have a personal spending account.

These accounts are used for lunches out, gifts, hobbies, and other small expenses.

I do want to point out that separate accounts does not mean secret accounts. We each know the balances in those accounts and in an emergency we can access them.

Financial infidelity can cause a break in trust between spouses so if you feel the need to hide money away from your spouse, there could be a bigger issue than just finances that needs to be addressed.

Beyond Bank Accounts

I hope this overview gives you a clear idea of the advantages of each style and helps you choose a financial system that fits you and your goals.

Of course, managing your checking and savings account is only one piece of the picture when it comes to merging finances.

Between the two of you, there may be work benefits that you want to optimize so you’re getting the best financial advantage that you can while still respecting each other’s view on money. How do you save for retirement when you each have your own risk tolerance and comfort level?

What about if either of you brings debt? Who’s responsible for what? How will you two handle that? What if one of you has a bad credit score? How should you handle getting a loan going forward?

Next week, I’ll share key conversations that you two need to discuss so you two are on the same page, not just with money, but on your goals.

Your Next Steps with Merging Finances

If you’re looking to set things up with your accounts, perhaps open up a joint account, consolidate accounts, or just get an idea of where you are now, Coastal has some great options for you.

Besides offering competitive rates on day to day accounts like checking and savings, they also have a wealth management team¹ dedicated to getting you closer to your big dreams.