How to combine finances is a question that every couple has to deal with when getting married or otherwise merging their lives.

[Photo by Everton Vila on Unsplash]

There’s a spectrum of how joint or separate your finances can be. and you can choose to fall anywhere on it, from totally separate finances with no jointly held accounts, to completely joint without any separate accounts (other than retirement funds, which are only able to be held in one person’s name). Most couples choose to fall somewhere in the middle. To be clear, I’m giving my opinion below on what I’ve seen work well or poorly, but the truth is that if the method you’re using works for you, then it’s the right answer. No one else has to approve or understand it.

Here’s a summary of three points on the spectrum:

Totally joint
This is the method my husband and I use, and it works really well for us, but it’s not appealing for everyone. In this scenario, all income goes into the family pot, and all expenses are paid out of it. It works for us because we’re both similarly thrifty, so we don’t have issues with one person annoying the other with their over-spending, and we understand that the other person might occasionally spend money in a way we wouldn’t choose to. It might not work quite as well when one person is a spender and the other is a saver. Using a mostly or entirely joint system works well when one person is taking on child-rearing or other household or care-taking duties and is sacrificing their own earnings to allow the other to work. Otherwise there can be an imbalance of power, as one party controls all of the money.

Yours, mine, and ours
Some version of this is probably the most common among couples these days. There are multiple adaptations of this. You should at least have a joint account to cover household expenses and monthly bills. And once you have kids, those expenses should be jointly paid. Here are two ways you can use this method:
(1) have your paychecks go into one joint account, except for an equal “allowance” for each of you deposited into separate accounts, or
(2) figure out the total of your monthly living expenses, and allocate that between you based on your income. So if it costs you $4,000 to live for joint household and family expenses, and you make 75% of the family income, you would put $3,000 into the joint account and your spouse would put in $1,000 every month.

Totally separate
Unless you have some good reason to do so – and some people do – I don’t recommend this method. In getting married, you’re signing up to be life partners and working toward common goals. It also seems complicated, as I usually see that each party tracks how much they’re spending and then pays each other back on a regular basis. That’s just adding unnecessary math to your life. And it can lead to a feeling of constant tallying and comparison.

In the months leading up to the joining of finances, it’s worth an honest conversation to see what makes sense for your particular situation. And take that time to also talk about your joint goals, how the bills will be paid, and how often you plan to discuss money, so that you can get started on the right foot. Keep in mind you can always change and adapt as your needs change over time. And you can always revisit this issue if you find that it stops working for you.