Till Death Do Us Part: Merging finances with your other half

combining finances when married or living together
Combining finances after marriage or when living together can be tricky.

My husband and I have been married for 16 years and we have had a fight or two (dozen) about money. Most of us go into marriage, or cohabitation, without much of a strategy other than an “I love you and I want to make it work” so it is not long before the money issue rears its ugly head.

Now that you have both become a half of one whole, how will you manage your finances?

I will not lie. When I got married I had no idea how to tackle the money side of the equation. I had started my new business just 18 months earlier and I was still not earning a salary. I was essentially penniless, from a cash flow point of view. My husband, a newly graduated doctor, took quite a leap of faith financially when he tied the knot to me!

The one thing I had going for me was that I had a positive net worth, because I had a small (very small) studio apartment that I had paid off already using the proceeds from my very profitable MSc degree (more on that in a future post). We made our home in this small studio, so I told myself at the time that my contribution was the fact that we did not have to pay any rent. My husband’s contribution was everything else, which was a major incentive for me to watch the pennies!

Luckily I married a man who had full faith in me. He never doubted that I would be successful and that my business would take off, so he had no problem with me forging ahead in my entrepreneurial venture even though I was not bringing home any dough. I did not enjoy being a “kept woman” at all, but I had no choice. It was either that or give up on my dream, and I had no intention of doing that.

So we set up a joint account soon after we got married, because if we had had separate accounts then mine would have been empty. This set the scene for how we continued to manage our financial affairs throughout our marriage. As my company grew and became more and more successful, my contributions to the common kitty grew. Similarly Mr SF also progressed in his medical career and his salary was always automatically deposited in the same account.

What’s mine is yours and what’s yours is mine.

That is the policy in the Smelling Freedom household. The way I see it if we are sharing our life together and sharing our DNA to make children, then it is ridiculous not to also share our money.

Obviously this system only worked because we had common goals. We were not aiming for financial independence or early retirement per se. We were aiming for safety for our family. Money may not buy you happiness (which is debatable) but it definitely acts as a buffer between you and the world, making it possible to overcome obstacles and sort out problems. I realise that money cannot sort out ALL problems, but let’s face it, it can sort out quite a few.

So this shared attitude to money and to not spending it frivolously was what made a joint account system work for us. Neither one of us ever had any urges to splurge on any big-ticket items before discussing it, so we never had any reason not to trust each other.

We also shared a common vice, travel, so we never had any disagreements when it came to breaking our usual frugal rules to book our next exotic destination. Nowadays we share everything, even a credit card, without any problems at all. The only time our system is inconvenient is when we buy each other gifts, since it takes some thought to pull it off without giving the game away on a credit card statement.

That said not all couples are the same, so what works for us might not necessarily work for you. I have some close friends who are an absolutely perfectly balanced couple, but who never merged their finances. Their salaries are deposited in their own accounts and they are each responsible to pay different bills. This system clearly works for them, which is what matters at the end of the day.

What is ultimately important is not what account your cash lands in, but the communication that goes into planning your financial future. As the years have gone by Mr SF and I have spent countless hours discussing our goals. We have both changed but we invested the effort required to change in the same direction, growing closer together and more aligned as time went by. Money is there to facilitate our dreams – it is not a goal in itself. We do not want to have X in the bank because we get a thrill looking at our bank balance. We want X because that is the amount required for us to live the kind of life we want to live, together and with our children.

If you agree on that, everything else should follow.

Author: Mrs Smelling Freedom

After selling my business my priority is consolidating my family's financial independence. I blog about Entrepreneurship, Financial Independence and living life to the full!

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