Should you manage money jointly?

Sharing finances in marriage or as partners is a big commitment. Allowing your other half to access your hard-earned money isn’t something to take lightly. There are various benefits to sharing and managing your money together, not only to strengthen your relationship but to combine saving efforts too.

If you’re wondering about taking the plunge and managing your money together, our guide can help you understand the main considerations, advantages and tips around money management for couples to decide if it’s the right choice for you and your partner.

Key factors to consider

The two of you may have completely different attitudes when it comes to money management, so it’s vital you discuss what’s important to each of you. If there are disagreements, then it could be a sign that keeping your money separate is the better option for a harmonious household.

A compromise is often to have a shared account for bill payments, which you both contribute to each month from your paycheck. Anything left, after you’ve paid your share of bills stays in your account and is yours to spend however you like. This can reduce arguments but can be difficult if you receive substantially different monthly paychecks.

Should you both want to open a joint account, consider these factors before committing:

• Poor credit history – Marrying or living with someone who has a poor credit score won’t bring yours down. But if you open a joint bank account or apply for a mortgage together it might – as you can be co-scored. Check your ratings, as it could make sense to apply for credit or a mortgage in only one of your names.
• Trust – Both of you will be responsible for the overdraft and any debt, so you need to set spending limits and trust each other to stick to them. If you both have very different attitudes to spending, this can be a sticking point.
• Monthly contributions – There are two ways to go about paying into the joint account – either you both pay the same each month or deposit an amount relevant to each income. Think about if this could cause an issue, especially if one of you earns significantly more.
• Investing – Why do you need to manage your money together? Is it to buy a house, afford a holiday or plan for a baby? If it’s none of these, you may not need to yet.

Money management for couples: advantages and disadvantages

Managing money together has its positives and negatives. Often, it’s advisable to keep your existing separate accounts alongside a joint one, just in case.

Shared money management for couples has advantages and disadvantages. Here are some of the main ones to help you decide if combining funds is worthwhile.

Advantages of sharing money management

• Easier bill paying – Pay your joint bills, rent or mortgage more conveniently and ensure they get paid on time.
• Budgeting – Tracking what you both spend is clearer, along with budgeting how much to allocate to groceries each week.
• Strengthen your relationship – Money worries are one of the biggest stresses in the US and a major reason for breakups – sharing successfully can strengthen your relationship.

Disadvantages of sharing money management

• Security concerns – The main concern about sharing money management is giving access to your money and financial information to a partner. If you split up this could jeopardize some of your money, depending on their actions.
• Judgement – The transparency of shared money management means you can examine your partner’s spending habits, which can lead to resentment – especially if one earns and/or spends more than the other.
• Surprises – If you only have one joint account, it will be hard to hide any money spent on gifts and other things you’d rather keep secret.

How to manage your money as a couple

If you’ve considered all the factors and decide that managing money together is the way forward, there are a few final things to do before opening your joint account.

• Choose whether you’ll manage money in one place or retain separate accounts on the side.
• Create a savings plan by setting short- and long-term goals, ensuring both of you are on board. Short-term aims could be simply saving for a vacation, whereas long term might be buying a house. These goals need to be realistic. Use this free budgeting worksheet to help work out your regular spending as a couple.

Before diving in, you could test sharing money with a joint account on the side without an overdraft. Try it for three months, each putting in a set amount and using the funds for agreed purposes. Assess how it went and then decide if you want to make it permanent.

Money management for couples can be an efficient way to jointly save for the future and meet your money goals together.