It’s not financial complexity that trips up most couples when they merge finances in a relationship. It’s the human emotions and different perspectives at play.

On this episode of Financially Well, the finance podcast for Millennials, I want to talk about how to combine finances after marriage. When Millennial couples think about combining finances, they seem most concerned about any new financial complexity that may arise. But complexity doesn’t actually pose the biggest challenge for a long-term relationship. Rather, it’s the human emotions involved. It’s the unique perspectives that each partner brings to the decision-making process.

Relationship Decisions After Combining Finances

I lived in Washington, D.C. when I was in my early 20s and single. D.C. is an expensive city, so I tracked every expense I incurred. I also kept an Excel spreadsheet that (attempted to) set spending limits. I assigned specific dollar amounts to every relevant budget category.

Then I met my now-wife.

She took a more laissez-faire approach to money. But she wasn’t careless or extravagant. She simply lived well below her means. And she didn’t have an interest in dwelling on every single small purchase. I admit: her approach stressed me out when we started combining finances. She also earned more money than me, which impacted what purchases we each considered within reach.

These differences continue today, but we have managed to agree on or work out our financial decisions over the years. Between my own experiences and my financial planning work with Millennial parents, I want to share my perspective on how to combine finances after marriage.

Specific Tactics Aren’t the Key to Combining Finances After Marriage

I regularly receive questions from other Millennials around my age about how to combine finances after marriage. Many people wonder whether one specific approach to joint accounts works better than others. I don’t believe so. Why? Well, the tactical finance decisions that you make – such as how many checking accounts you have – typically aren’t responsible for creating major financial issues with your relationship.

How to Combine Finances After Marriage: The Basics

Even so, let’s review some background information to keep in mind when Millennials are combining finances after marriage:

• You’re less likely to have significant arguments about money if both partners share their thoughts and concerns early and often in the relationship. Honesty and vulnerability are necessary to establish trust and make strong decisions as a financial team. But hold off on combining finances until you feel confident that the relationship has a solid future.

• In theory, the most efficient way to combine finances with your significant other is to agree to share all accounts, assets, and debts. In practice, for a variety of reasons, many Millennials are not interested in this approach. And that’s perfectly fine – no judgment here.

• For Millennials, the most common financial structure for a two-income couple involves a combination of individual and joint accounts. Each partner keeps their pre-existing assets and income separate, which helps to preserve their financial independence. But they each contribute to one or more joint accounts to pay shared expenses. The dollar amount that they each contribute is based on the percentage of household income they each make.

How Financial Uncertainty & Stress Actually Emerge After Combining Finances

When you’re single, personal finance looks easy compared to joint accounts. You earn the income. The accounts belong to you. The spending decisions are yours. Yet, managing money still can be quite challenging under these circumstances.

Many Millennials enter a long-term relationship already struggling to repay student loans, invest for the future, and budget consistently. Marriage, and perhaps becoming a parent, may invite even more advanced financial decisions into your life. As a result, your choice about how to combine finances after marriage almost certainly will make your financial life more complex. For those Millennial couples that do decide on joint accounts, the way in which they do so feels critical. 

Ultimately, though, how you combine finances after marriage only needs to reflect your personalities and preferences. The structure you choose may change over time. After all, your preferences will evolve. And small headaches will arise that will threaten each partner’s sense of financial wellness. This holds true no matter what structure you choose. Any larger, more enduring issues that emerge will stem from the unique characteristics you each bring to the table. You’re now making financial decisions that factor in two people’s hopes, fears, and stresses around money. You’re no longer managing money for only one individual. It’s not the financial complexity that trips up most couples — it’s the human emotions involved.

How to Combine Finances After Marriage: Emotions & Past Experiences

Let’s assume your partner has a similar level of education, salary, and debt burden as you. You also both think and feel about money the same way, right? It’s critical to consider how your partner’s upbringing and experiences with money have affected their adult habits. Our immediate families are the earliest, most common influence. Your partner’s parents, for example, may have had strict rules about spending. As a result, your partner may feel stress each time that you spend meaningful amounts together.

Laws, government policies, and cultural norms play a critical, overlooked role, too. Think about how you or your partner may view your relationship finances due to:

Traditional Gender Norms 

Some men may have learned to feel emasculated when their female partner pays for a large purchase. Some women, meanwhile, may hesitate to speak up about a joint investment if our society has (wrongly) convinced them that men make better investment choices.

Systemic Discrimination

Long-oppressed groups, such as the Black and LGBTQ communities, continue to face barriers to building wealth. And this dynamic may permeate every aspect of their financial decisions. Even within the context of a loving relationship, they may feel uncomfortable. Or they may feel an inclination to act overly conservative with their personal finances.

Outdated Financial Rules of Thumb

Almost everyone’s perspective on money includes tips and advice that they’ve picked up from various sources over the years. Such comments from parents, friends, or co-workers often are well-meaning. But they may not reflect the current economy or the world as it actually works. Mostly importantly, their financial wellness tips may not reflect your circumstances, interests, or concerns. Millennials who have heard they’re “behind” on retirement savings, for example, may have received an unrealistic barometer for measuring their progress.

In reality, few couples will enter a relationship with similar salaries or debt levels. Some people will have outstanding credit card debt. Others may have significant student loans to repay. Some partners may enjoy spending frivolously while they’re single and without kids. Other people may financially support a sibling or aging parent. Such financial differences between you and your partner seem to make separate finances the obvious solution, right?

Shared Life Goals Benefit From Combining Finances After Marriage

But what if I ask you, “Are you and your partner committed to any shared life goals?” Almost every couple will answer “yes.” These goals may involve travel, buying a house, saving for college, or something else entirely. And these goals will require or benefit from joint financial decisions. Arguments about money are a primary reason why relationships fail. You may prize your financial independence. You may dislike some of your partner’s financial habits.

But you’re in a relationship in part to achieve these shared goals. You’ll surely want to do so in a timely, cost-efficient, and fulfilling way, right? Shared goals don’t mean that you need to abandon your individual goals or even your personal indulgences. You do, however, need to be willing to listen to, acknowledge, and respect each other’s financial beliefs, concerns, and goals.

How to Combine Finances After Marriage Amid Unequal Financial Circumstances

An initial stumbling block in some relationships occurs when both partners work. For most of U.S. history, women weren’t even given the employment opportunities to make this much of a discussion at home. But female participation in the U.S. workforce increased rapidly from the 1950s through 1990s. As a result, two-income households have become more common, particularly among younger generations. In some relationships, though, each partner brings in significantly different amounts of money.

Each person in a relationship wants to contribute their share to common goals and obligations. And they want their partner to see and value those contributions. Income differences can make this seem like an uneven playing field, though. Without open dialogue, feelings of guilt or inadequacy may soon emerge. But for a Millennial couple in a long-term relationship with some shared life goals, these differences aren’t a problem as much as an opportunity. Think about both high-cost obligations (such as repaying student loans) and high-value purchases (such as vacations). When you’re putting money toward these goals, the higher-earning partner’s additional income can create options that benefit both partners over the long term.

Such opportunities won’t materialize or be sustainable without ongoing financial conversations, though. How does each person want to approach their income differences? What currently unspoken or difficult-to-identify issues might exist? Both partners need to agree on how they each will contribute to shared costs. They need to understand that contributions to the household can take many forms. In fact, some forms don’t involve money directly at all. The lower-earning partner may need to be willing to accept their partner’s greater financial role (in dollar terms). And the higher-earning partner may need to feel comfortable allocating more of their earnings to the relationship.

Combining Finances After Marriage Looks Different for Every Millennial Couple

More than 10 years after my wife and I started dating, I find that we no longer dwell on the logistics of combining finances. We still hold regular financial conversations. In these discussions, we make sure we know how we will pay bills. We talk about what else we can do to make progress on our goals. But these aspects of the discussion only take a few minutes. Most of our conversation time centers on what we each value and what we want our lives to look like in the years ahead.

My favorite thing about these high-level, aspirational conversations is that they’re usually more fun than talking about financial tactics. We save the discussions for when we’re in good moods and prepared to share our hopes and concerns. We’ll often talk while walking around a park or hanging out at a neighborhood coffee shop in Washington, D.C.

Managing finances as part of a relationship looks and feels slightly different for every Millennial couple. Some partners quickly decide to join their entire financial lives together. Other people want to maintain every bit of the financial independence they have earned. Many couples find some middle ground, perhaps including a prenup that delineates and protects what each partner has achieved prior to forming the relationship. There’s no single, “correct” approach — only open dialogue, trial and error, and the pursuit of a shared life together.

I encourage you to subscribe to this finance podcast for Millennials to learn more about how you can boost the financial wellness within your relationships. I hope you and your partner had a nice Valentine’s Day!

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About Kevin Mahoney, CFP®

Kevin Mahoney, CFP® is the founder & CEO of Illumint, an independent firm in Washington, DC that offers financial planning for Millennial parents. He specializes in navigating the new financial decisions that arise during our 30s and early 40s, such as repaying student loans, buying a house, saving for college, & investing for the future. In addition, Kevin also leads a financial wellness benefits program for Millennial employees around the country, including group speaking engagements.