If you’re wondering how to effectively merge your finances after marriage, changes are that you’ve probably considered making a long-term commitment to your partner, (or you’re hunting for red flags ❌

Hopefully, you fall into the former category, as finances can be a very touchy subject. Research shows that financial problems are one of the chief reasons why married couples split, and couples that merge finances tend to stay together longer.

Image credit: Couples & Financial Stress: Discover the Impact on Relationships (retireguide.com)

So if you take anything away from this edition, take that with you. In this edition, we’ll discuss:

• Practical steps for merging finances as a couple - talking, planning, and budgeting

• Structuring joint accounts based on your trust levels

• Using tech to your advantage

• Long distance dating ideas to help you (or decide not) get there faster

👩‍❤️‍👨🤑 2 incomes become 1

Tackling finances as a couple is one of the inevitable bittersweet symphonies that come with a promising relationship. And it’s not just bills you need to tackle. It’s also the business of filing taxes, managing debt, funding trips, streamlining investments, etc - all of which can get overwhelming to handle once couples begin to plan together for the long term. 

So what’s the best way for partners (especially those with disparate financial backgrounds) to merge incomes?

💬 Talk

Reads like the canned response for every relationship-related question, but it is for real. Talk. It’s easy to focus on the mechanics of actually handling joint finances, and completely miss the big picture. 

Have a conversation to ensure that you’re both on the same financial page, and that you’re working toward the same goals because financial compatibility is just as important as sexual compatibility. Be open to each other about where you are financially, and also what you want your future to look like to create a spending plan that works for you both.

📊 Plan and budget

One of the key outcomes of your discussion should be a general understanding of what your individual dreams/hopes/plans are, and how they meet in the middle. When do you plan to retire? What kind of life do you wish to live? Do you want kids (if so, how many)? Do you intend to “live life to the fullest” now, or do you prefer to save for the long term?

The answers to these questions will help you figure out where you’re going, and what you both need to do to get there. For example, to meet up with a yearly holiday and meet your retirement goals, you might choose to open 2 savings accounts - one long-term, and the other short-term. 

As you create your budget, you want to list out all your incomes and expenses, then figure out if there are any areas from which you can cut your spending. You also want to determine who pays the bills and how these bills should be made - from your personal accounts, or a joint account.

⛙  Merge with joint accounts

Disclaimer: Joint accounts work best within the confines of a stronger relationship commitment (aka marriage). 

Merging finances once you get married usually involves setting up 

• a joint checking account (for bills, outgoings and credit building)

• a joint savings account for your long term savings,

• and (for most couples), retaining personal accounts to avoid “you bought whaaaaaaat?” type scenarios. 

How you both choose to fund your joint account(s) depends on your trust levels. 

Option A (High trust). Both put all earnings in a joint account for bills, savings etc. Then both draw a monthly allowance for personal ‘fun’ and hobbies. 

Option B (Moderate trust). Divvy up their joint account contributions as a percentage of your combined income. For example, the partner who earns 5x more, pays 5x more into the joint account and keeps the rest of their earnings in their ‘personal’ account. 

Option C (Low trust). Divvy up the bills and pay bills individually from your personal accounts. 

It’s easy to see how:

High trust = more transparency, fewer arguments 

Low trust = less transparency, more arguments (at least over money). 

In essence, marry someone you can trust to reduce your chances of running into financial headaches in the future

🦾 Use technology to your advantage

First, as much as possible, automate everything. If you have cash in hand, you will find a million ways to spend it. It’s basic instinct.  The best way to avoid debt is to have a plan for money before it reaches your hands, and automation is the most effective way to do this. 

Use direct debits, Excel sheets, and whatever techy solution you can find to automate your joint finances and spend your energy on looking after each other. 

And the world of investors seem to be increasingly interested in innovative solutions that help couples manage their money better. This shows that more and more couples are looking towards these solutions, some of which include:

• Tandem (not a bank), which recently raised $3.7m 

• Smoov App (not to be confused with the European charging points app)

• Zeta App, offering joint accounts for families

• The humble Google/Excel spreadsheet for budgeting

Prolific long-distance dating ideas to try with your partner

And if you’re not yet at the point where you feel like you’re ready to make a long-term commitment because of physical distance (but would like to try to get there), here are some exciting ideas for long-distance dates you could try.

• Online escape rooms, are apparently a thing (and they are said to help with communication)

• Bond over a game. In 2024, there’s so much potential to create surprises and unique digital experiences that you can both bond over,  using the humble game console. 

• Shop for the same ingredients, cook together over video, set the table together and eat together 

• Visit a museum virtually using Google Arts

• Collaboratively create an “ongoing” couple’s bucket list and cross items off together

• Create a playlist together (mixtape if you want to show your age) and listen to it together

🧮 Challenge time

This weekend, why not try to understand your partner’s future vision? Lightheartedly ask your partner a simple, but revealing question like “Where do you want to live long-term?”. This is an easy way to help give each other some perspective on your long term expectations. 

And if you’re confused about their answer, share with an expert via our Agony aunt section below 👇

👵 Agony Aunt

Have a pressing relationship issue that is driving you up the wall? Share it anonymously and you could get professional advice - WITHOUT the fee!

(Check out our next edition to see if you’ve been selected to get your question answered)