In the days after you say "I do," you're combining "more than savings accounts and credit scores," says Elle Kaplan, financial expert and founder of wealth management firm Lexion Capital Management. You very well could be asking yourselves whether you should be combining your finances in every single way possible, from taking on one another's debts to merging your financial goals.
"Every relationship has different dynamics, so there is no one-size-fits-all solution for combining finances," Kaplan says. When it comes down to bank accounts, "what works for many couples is having a joint account for long-term financial goals and household expenses, like retirement and paying electricity bills, and having separate accounts for each person's day-to-day spending."
As you craft a concrete financial game plan that will help you reach your long-term relationships goals — think: buying your first house or putting your children through college — you may realize that "working together is extremely powerful and advantageous," says Kaplan. "Having your financial powers combined is invaluable, and agreeing on goals while investing your money together can be much more effective than going at it alone."
Tackling your individual debts can be a touchy subject. But paying down each partner's high-interest debts as quickly as possible, as well as eliminating small debts, with your combined incomes is smart, Kaplan says. "You avoid further interest racking up," she explains, "and even paying a tiny debt off will lead to a sense of accomplishment and is another step toward financial freedom."
When it comes to money, another thing couples should do together is "come up with a system to work together on spending," Kaplan says. "Some methods are checking with each other for purchases more than $100, or having a monthly meeting to go over finances." You may also choose, in this instance, to keep your money separate. "It works for many couples to have separate discretionary accounts for 'fun' and day-to-day spending," she says.
Finally, as you discuss combining your finances, remember: "Money and financial issues are often cited as the number one reason why marriages fail," Kaplan says. "Having clear communication about finances from day one will strengthen a relationship and allow couples to achieve their goals together."