In the past, people often started married life with blank financial slates. That's rarely the case today. Now more couples enter marriage with assets acquired while single or in a previous relationship.
The average age of first marriage in the U.S. reached a record high in 2021—age 28.6 for women and 30.4 for men.¹ Additionally, close to a quarter of all currently married people were previously married to other people.²
These trends make merging finances a lot more complicated. Should couples merge their finances at all? For some couples, it might make more sense to keep finances separate.
According to one study of married couples, older couples were more likely to have only joint accounts, while younger couples tended to have only separate accounts. The survey found that nearly half of baby boomers (49%) and Generation Xers (48%) who are married or live together have only shared bank accounts. But 45% of younger millennials (ages 26 to 32) who are married or living with their partner don’t share any accounts.³
Tips for Merging Finances
Whatever your decision about combining finances, it’s important to foster clear and open communications before and during marriage. Talking may eliminate many disagreements about money and help you plan a successful financial future as a couple.
More people are entering marriage with money acquired while they were single or in a previous relationship.
Here are some tips to help couples decide how to structure their finances in a marriage.
How to Combine Finances After Marriage
Some partners use a prenuptial agreement to solidify their financial agreements. While a prenup is often seen as a security plan in case of divorce, it also should be considered a valuable resource to protect the financial interests of both parties during the marriage.
If a couple doesn’t sign a prenup before tying the knot, they might sign a postnuptial agreement. However, it’s often easier to sign a prenup and start the marriage with a clear understanding of financial expectations whether you’re combining finances or not.
All income and expenses are managed from one account.
Partners manage their own money and decide how to split shared expenses.
Joint Account and Separate Accounts
Shared expenses are managed from the joint account; separate accounts are for personal spending.
Should You Combine Finances in a Marriage?
Think About Credit and Debt History First
Joint credit cards or adding another user to an existing account may affect the credit score of both partners—either good or bad. A lower overall credit score makes it harder to secure low interest rates for major purchases, like vehicles or homes. It also could make it harder to get other forms of credit, which hurts both parties.
Additionally, spouses should consider different feelings about debt. How would a saver feel about combining accounts with someone with a lot of credit card debt? If your partnership can withstand conflicting values about money, that’s great—but keeping accounts separate might help avoid resentment.
Examine Your Shared Financial Future
As mentioned above, not all couples merge their finances. This is sometimes true even if they have similar credit scores and financial views. Joint accounts give both partners more visibility on how money is being spent and lets both people monitor financial accounts for low balances or fraudulent transactions. It also may help couples work toward the same financial goals. However, the trade-off is that this approach means less financial autonomy.
Maintain Autonomy With Separate Accounts
Separate accounts give each person more autonomy. Women in particular might benefit from separate accounts and more financial autonomy, especially when it comes to investing. Statistically, women have less money in retirement but have a longer life expectancy. Men often contribute more of their income toward investments and retirement, creating a gender investing gap. For all of these reasons, it’s important for women to invest and secure their financial future.
However, with separate accounts, it may be harder to get a shared financial vision. Similarly, you might make duplicate purchases if you don’t see that your partner has paid for a streaming service or other subscription. If your partner is responsible for paying the mortgage or the electric bill, you also may not be able to see if those bills have been paid.
Consider Separate and Joint Accounts
Many couples strike a compromise with a mix of joint and individual accounts. Joint accounts might be used to pay shared expenses like rent or a mortgage, while each partner would maintain individual accounts for personal use. This arrangement lets couples work toward joint goals, such as a home or car purchase, while offering some independence for personal spending.
It also may be good for credit history since you’d keep existing accounts. Closing an existing account to start a new one with a spouse or adding a partner to an existing credit card or loan could hurt more than help.
When it’s time to pay bills, couples who choose not to combine finances into a joint account should designate who’s responsible for paying for certain expenses from their own accounts. Many couples prefer knowing that one person will pay for utilities, for example, while the other partner pays the mortgage.
Be Willing to Adjust
Situations change throughout a marriage, and couples should be open to reconsidering financial agreements that might have worked during an earlier stage of their relationship but aren't as feasible now. Major life events such as the birth of a child could be a reason to start commingling finances if you didn't previously.
Working in Partnership for Common Goals
Whether you decide to combine finances entirely, partially or not at all, it's important to talk with your future spouse about your common goals for the future.
For example, a couple where one spouse is self-employed may need a different retirement strategy than a marriage where both individuals have access to 401(k)s. Other goals may include buying a home together or saving for a child's college education.
Financial professionals can meet with both of you to provide guidance on your unique situation. They can point out ways to maximize each person's tax savings and determine how much each person should save to reach your retirement goals.
U.S. Census Bureau, 2021 https://www.census.gov/newsroom/press-releases/2021/families-and-living-arrangements.html
Pew Research, 8 facts about love and marriage in America, Feb. 13, 2019, https://www.pewresearch.org/fact-tank/2019/02/13/8-facts-about-love-and-marriage/
Creditcards.com, Jan. 24, 2022, https://www.bankrate.com/finance/credit-cards/us-joint-account-survey/
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.