A great way to come together in budgeting is to combine your finances with your spouse and make all of your money decisions as a team. When my wife and I were planning our wedding, we made the decision to combine all of our finances, giving equal access to all of our bank accounts. I believe this is one of the biggest reasons we are so successful with our money. Not only have we had financial success, but we have seen many other advantages in our marriage, so for us, combining finances just makes sense. (If you are not yet married or are single, this post might not relate to your current situation, but I think there is still value that can help you prepare for when you are thinking about getting married)
My wife and I will celebrate our third anniversary in May of this year and have had many financial successes in our young marriage. I attribute a lot of our success to combining our finances when we got married. Even during our dating and engagement we shared all of our financial information with each other in preparation for working together as a team. Although our bank accounts were still separate, we pooled our money together to pay off student loans, credit card debt, and our vehicles. We are very goal oriented, so it only made sense to get a head start on our intense goals. Then once we tied the knot, we officially joined our finances. In order to show the power of combined finances, I want to share our financial goals when we started dating, and also the progress we have made. Here are a few of the big goals we had at the time in 2013:
- Pay off $90,000 of student loan debt in 5 years
- Pay off approximately $2,000 credit card debt
- Finish paying off a car, approximately $1,000
- Save for our honeymoon to Mexico
- Save for our five year anniversary trip to Ireland
- Start investing and saving for retirement
- Save money to buy a house
- Get life insurance (this felt very adult)
Looking back on these goals, holy cow do they seem lofty, especially on two teacher salaries. (During this process we both got a second job serving at a restaurant, which has also helped make our goals possible) Being a unified team has helped us tremendously to accomplish our goals. It is now 2017 and we have actually crossed several of these items off our list. Check out where we currently stand on each of these.
- Student loans: $30,000 left, of which we only need to repay $13,000 because the rest qualifies for loan forgiveness. It will be paid off by April 2017.
- Credit Card Debt: $0
- Vehicles Payments: $0
- Honeymoon: Paid for with cash
- Trip to Ireland: $2,000 saved
- Investing: Opened two Roth IRAs and contribute every month
- Bought a house
- Have life insurance
As you can see, we have kicked some serious butt on our financial goals and I attribute a lot of that success to our team approach. I don’t say any of this to boast, but simply to demonstrate the power in combining finances with your spouse.
Combined Finances Increases Trust
Research and studies point to money as a leading point of conflict in marriage. In fact, most sources will place fights about money in the top five reasons why couples fight. If you choose not to combine finances, I actually think it creates more opportunities to fight. Also, it has the potential to create distrust. For example, if my wife isn’t willing to give me access to her financial information, including her income, debt, and expenses, it would make me wonder if she is hiding something. Also it would be tough for us to pursue financial goals together. When I think of my wife, she is someone I can trust with my entire heart and know that she wants the best for me. One element of that trust is knowing that I can share my finances with her, even when they are a complete disaster. By choosing to combine our finances, we are demonstrating that we trust each other completely. When Jenna and I made this decision, we went all in. We have all joint accounts at the same bank. Both of us can withdraw money, deposit money, and have access to pay any bills we have, including student loans. In the end, I am responsible for actually managing our income and expenses, but there is full communication during the entire process. There is complete transparency and we discuss any major purchases ahead of time.
I believe combined finances also comes back to your budget. If you are on the same page with your budget, it is much easier to trust each other with your money. I never have to wonder how Jenna spends her money, or vice versa, because it is OUR money. When we said, “I do,” we agreed to share every part of your lives with each other, so all of our income, debt, and expenses became a package deal. Another advantage I love about marrying our finances is that we can plan for our future together. Each month we talk about our budget, upcoming expenses, and remind each other of our financial goals (like paying off student loans). Neither one of us is has to worry if the budget is being blown by unnecessary spending. There is complete trust and accountability, and I believe that deepens our relationship.
An Act of Commitment
I think it goes without saying, marriage takes a lot of commitment. In sickness, health, wealth, poverty, good times, or bad, you are vowing to work through conflict, have your spouse’s best interest at heart, and that takes an incredible pledge. When you join your bank accounts and give each other equal access, it is a physical display of your commitment to do life together. It is a symbolic representation of the vow you make to join your lives together, to truly become one. I don’t think you can fully weave your family together without also doing the same with your finances.
I believe joint finances also adds a deeper layer of intimacy in your relationship. This may sound strange, but stick with me here. It is not uncommon for people to have pride issues when it comes to money. Whether it is conscious or subconscious, it is easy to be sensitive when it comes to money, and it is rare for people to actually share financial details with even close friends and family. Things as simple as income, expenses, and budgets can be very intimate parts of our lives and easily judged and ridiculed by others. I think judgement and ridicule is a big reason people are hesitant to open up their financial lives. In order to share your financial story with your spouse, you need to be vulnerable, which is down right hard and even intimidating. It is a little like telling someone ‘I love you’ for the first time. You are opening yourself up with the possibility of being totally crushed by rejection, embarrassment, disappointment. Sharing your finances can create the same situations! Nobody wants to feel all that junk, but being vulnerable with your spouse creates a beautiful opportunity to build a deeper intimacy. Yes, it is a risk, but I think it is worth taking. Be vulnerable and build intimacy.
Wrapping it up
In the end, marriage is a team sport, so working together and pooling all of your resources is incredibly important. If you choose to combine finances, I believe your marriage will flourish and your goals will fall one by one like a row of dominoes. Choose to trust your spouse, be vulnerable, build intimacy, and deepen your relationship one financial decision at a time.
Let Me Know in the Comments
Why do you combine finances? How has it strengthened your relationship?
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