Five Good Rules for Combined Finances
If you and your spouse are considering combining your finances, here are some tips that may help you manage your family finances together. While not all of these will work for everyone—there’s no one-size-fits-all approach—you may want to consider which of these will work for you and your marriage.
Both Parties Have Equal Access
If you and your spouse have combined finances, both parties should have equal access to all of the accounts. This is especially important if one party is financially dependent on the other, is not earning any income whatsoever. Unfortunately, many spouses financially abuse their partners by not allowing them to have access to the family’s finances. Combined finances are a great way to promote trust and financial transparency within a marriage—but this doesn’t work if one spouse is intentionally kept in the dark regarding the family’s finances. Both parties should have full access to the family’s finances, and ideally, both parties will look over the statements regularly. Furthermore, both parties should have an idea what bills will cost and when they’re due.
Equal Say in Spending
Both parties ought to have an equal say in how the money is spent. If you and your spouse want to combine your finances, you will need to be able to make compromises, openly discuss finances. If you and your spouse cannot do this, it may be a good idea to hold off on combining finances until you’re both on the same page regarding how money is spent. It’s pretty unusual for two people to make exactly the same salary down to the penny. In most marriages, there’s usually a higher earning spouse and a lower earning spouse. If you and your spouse have combined finances, it is important that one spouse does not have more of a say than the other just because of the fact that they earn more.
My Money Is Your Money
If you and your spouse are going to combine finances, putting all the money in the same “pot” is generally recommended. Some couples decide to have one checking account where all the money goes into. Other couples combine finances and have separate checking accounts under the same account. When you and your spouse earn different incomes, splitting things up as “my money” and “your money” can lead to an inequality in lifestyle, which can lead to resentment—especially if one party is forced to live at a lower standard of living simply due to not having enough money to have all the nice things their spouse has. The more stringent parties are about having their own money, the greater the inequality (if there is any) may be felt.
Ask Permission before a Big Purchase
If you and your spouse have chosen to combine finances, both parties should feel able to spend freely—but only to a certain extent. Setting a dollar limit for purchases you can make without permission is generally a good idea. For example, you may have a rule that any purchases over $100 have to be agreed upon by both parties. The dollar limit you set should be proportional to the income you and your spouse have. Having to approve every little purchase with your spouse can be overwhelming, and it can lead to resentment if one spouse isn’t able to get the things they want—especially if the family is able to afford those things. However, having a dollar limit proportional to your income can prevent financial strain from one party spending too much money without warning.
Know What’s Best for You
Many relationship experts and family law attorneys suggest combined finances—but that doesn’t mean that combined finances is best for everyone. In some situations, combining finances may actually put the family at financial risk. Financially impactful addictions such as drug use or gambling may make it unwise to combine finances. Spouses who cannot adequately manage their finances and ar consistently putting the family’s financial future in jeopardy might not be ready to have combined finances—especially if the bills aren’t getting paid. Lastly, those who are in abusive relationships should not combine finances, even if you and your spouse are already married. Having separate finances can make leaving the relationship easier if you’re in an abusive relationship. Remember, these are just general guidelines. Some of these may not be right for you and your spouse. You will have to evaluate and work with your spouse to find out what works best for you and your marriage. If you are considering divorce, and you have questions about how your finances will impact your divorce process, contact CoilLaw today to get an initial consultation set up.
