Marriage and Banking: Financial Strategies for Two-Income Households

Estimated read time: 5 minutes

You took Beyonce's advice and put a ring on it, but now that you're married you're wondering what to do with your finances. Should you go all in and work toward your financial responsibilities and goals as a team, or should you try to avoid arguments by keeping separate checkbooks while you share your lives?

There's no right or wrong answer here — many couples choose to combine their finances while others opt to stay out of each other's financial business. Only you and your spouse can decide what will work best for you. Here are some basics you should consider to help you make your decision.

Explore Your Current Situation

Before you can decide what's best for your finances and relationship, you have to know where you stand. Maybe you already know every penny you owe and to whom, but you might have no idea of your partner's financial obligations. Is there outstanding credit card debt? A hefty car payment they have locked into for the next six years?

This is a discussion that should have taken place before the marriage, but some people are surprisingly hesitant to talk about finances. If you don't know what you owe collectively, now's the time to figure it out. Go old school if you want and grab a pen and notebook and start calculating your total outstanding debt.

Make a Budget

The idea of making a budget can be a real downer. For many people, it's right up there with root canals and visits from their mother-in-law. But budgets can be incredibly helpful when it comes to seeing how much money you have left at the end of the month. They also help with pinpointing wasteful spending habits or planning for infrequent expenses you don't consider in your daily life.

Every couple should do this together at least once so they'll both have a clear understanding of where their money is going.

Talk About Where You Spend Money

Does your spouse have a serious drone addiction that you find ridiculous? Does your partner see red every time you bring home a new shirt that looks just like five others already hanging in your closet?

The fact is everybody wastes money somewhere, and people can be highly critical of that wasted money until it comes to their own indulgences.

If you two are frequently annoyed by each other's spending habits, you may want to consider joining checking accounts to pay off your bills and monthly expenses. Then you can each have an additional account that is completely off-limits to your spouse.

You can each have a designated amount of money every month that you can spend in any way you see fit. He can happily indulge in his drones without any judgment from you, and he won't throw any shade your way when he sees you wearing a new shirt. You'll be working together as a couple while still enjoying a little freedom.

Look At Your Long-Term Goals

Before deciding if you're going to combine or keep your finances separate, both you and your spouse should sit down and examine where you want your life to go. What are your goals?

If one of you wants to retire early and the other wants to drive a fancy car, you might have to do some negotiations with each other to reach a happy medium.

Create an Emergency Savings Account

You know why money is one of the top reasons couples fight? Because if you don't have enough saved it can be super stressful. A lack of savings can cause sleepless nights and enormous resentment in a marriage. If your car needs repairs and you don't have enough saved up to fix it, you'll turn on each other faster than the contestants on Survivor.

The one sure way to take the pressure off is by creating an emergency savings fund. You don't have to park it anywhere fancy — you can put it in a savings account. Another option, which will typically earn more interest, is a money market fund. Money market funds are usually limited when it comes to how often you can access them, but that's a good thing for emergency savings. You shouldn't tap that account unless you absolutely have to.

Designate a Manager

This will be the person who takes on the job of paying the monthly bills, tracking investments, and being the watchdog for your finances. It doesn't have to solely be one person — one may choose to pay the bills while the other might like the idea of handling investments. And both people should have access to all financial information whenever they want to see it.

Sometimes in a marriage though, you have one person who is better at meeting deadlines and remembering to pay bills before they are overdue. You might have someone who likes planning long-term more than the other person does.

This isn't about giving one person control of the purse strings — it's about acknowledging who is better at certain tasks for the good of your marriage and financial situation. You don't want the expense and headaches of dealing with overdue bills that could have been paid on time.

Consider Life Insurance

If you didn't have life insurance before, marriage is the perfect time to invest in a policy. With two incomes now, you might live in a nicer home than either of you would have been able to afford without the other one. To protect you both, you should get policies that would cover the burial cost of the one who dies first and enough to pay off your mortgage so the surviving spouse wouldn't be losing their partner and their home all at the same time.

Is money tight right now? Then consider term life insurance instead of whole life insurance. It's cheaper because, unlike whole life, it doesn't build equity.

Don't Forget to Take Care of the One-Time Details

If you have an existing life insurance policy, make a call to your carrier to add your spouse as the beneficiary. Likewise, you should do the same with your 401(k) at work and any other benefits they might qualify for, such as a pension.

Figure out who has the cheaper and better health insurance policy through work, and sign up for that one as a family if you're allowed to do so and if it saves you money. It'll take a little work to crunch the numbers, but you could find substantial savings that way.

Now that you're married, you may be in a new tax bracket. Your tax withholdings should be changed to reflect that so you don't owe money when you file each year.

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