You, Your Spouse and Your Money, Articles, Sex & Love

You've joined your lives, but should you combine your cash, too? Here's some help in deciding how to organize your finances as a couple, and tips on how to have that all-important talk.

In marriage, you join your hearts and hopes…but what about your bank accounts? How to merge and manage your money is a talk that many couples avoid. That’s no surprise, say financial experts. Think of all the potential flash points: different incomes, different spending habits, different priorities, and maybe even different financial goals.

Here’s what you need to remember.

Each of the account options listed below offers benefits and disadvantages. It’s not a matter of right or wrong but what works for you.

Second, each option requires a conversation—not a few minutes stolen while doing the dishes but a sit-down talk. “People spend more time discussing the options for their cable subscription than they do deciding on their finances,” says Jon Billings, a financial counsellor in Winnipeg.

Finally, whatever you decide with your finances is not set in stone, points out Valerie Chatain-White, a CFP Winnipeg financial planner. It’s a good idea to revisit your account arrangements throughout your marriage, as your income and expenses change, as you reach certain milestones (having children, buying a home) and as your goals evolve (saving for education or retirement).

So what do you need to know to decide on the best arrangement for you right now? Here are some tips from the financial professionals.

Joint chequing and savings

Pros
• You’re making a statement that you’re in this together, financially and emotionally. All bills are paid from, and savings held in, a single pot.

• Simplicity—no transferring between accounts or figuring out who pays or saves for what.

• Everything is open. “It reflects a relationship where you want trust, transparency and accountability,” says Teresa Black Hughes, a financial planner in West Vancouver, and chair of Advocis, the Financial Advisors Association of Canada.

Cons
▪ Who’s in charge? One account requires a higher degree of communication.

• Less privacy. Your expenses and savings are an open book. “That may not suit people who are fiercely independent,” says Black Hughes.

• Possible resentment if your incomes are unequal. That is, the higher-income spouse may feel penalized, says Chatain-White. It's important to figure out who will pay predetermined amounts.

Having the Conversation

• As a foundation, talk about your joint ownership—“It shouldn’t matter who earns what,” says Billings. “It’s not my money or your money; it has to be our money.”

• Though you’re sharing the pot, set a limit of what you can each use as “play money” without running a purchase by the other spouse. “Otherwise,” says Billings, “one spouse can outspend the other, and resentment can build.”

• Decide who will take the lead in paying the bills. One spouse is usually more interested than the other. Regardless, you need to establish how both of you will review and understand where all of the money is going.