When it comes to managing money as newlyweds, there is no one-size-fits-all formula. But there are guidelines that every couple should consider when deciding what will work best for them. As Stephanie Genkin, a New York City financial advisor and founder of investment advisory service My Financial Planner, points out, "Marriage isn't just a romantic union; it's an economic one as well." For guidance on when to merge and when to stay separate, read on.
The experts agree: Open a joint checking account, but keep your separate accounts, too. "Think of it as three buckets: yours, mine, ours," says Farnoosh Torabi, a Brooklyn-based financial journalist and host of the So Money podcast. Most people heading into marriage have established financial independence, and the last thing they would want is to have to get permission before splurging on a new purse or treating coworkers to a round at happy hour. To account for differences in salaries, Torabi recommends that both people contribute the same percentage, rather than a lump sum, to the joint account, which should cover common expenses like rent, groceries, and utility bills.
If you already have your own savings account, it's fine to keep it. But when it comes to saving for common short-term goals—like buying a new car, taking a vacation, or buying a home—your best bet is to pile your money together in one account, which is also good for depositing any cash gifts you received at your wedding. For retirement savings, both people should keep contributing to their own accounts, whether they have company-sponsored 401(k)s or IRAs. "Make those savings 'ours' by listing each other as beneficiaries," says Torabi, who also likes brokerage accounts, which give you more investment choices via stocks, bonds, and mutual funds but—unlike a 401(k)—let investors make penalty-free withdrawals.
While it may not be particularly romantic, discussing each other's credit history and score is an important step to take before you're married, so there are no surprises later and you can create a plan for building your financial life together. Hitching your credit to your spouse's can be the right call if one person is looking to raise his or her credit score or build credit history. "The person with stellar credit can make her spouse an authorized user on the card without actually issuing a second card," Genkin says. Over time, that partner would see an increase in credit score just from being associated with the account. Why that matters: If you plan on buying a house together, you can borrow more at lower rates when both of you have credit scores you can be proud of.