Money Talks, So Should You

Having the money talk: Should you merge your finances?

Temma Ehrenfeld
by Temma Ehrenfeld, Dimespring Contributor

Your sweetie has a financial history: school loans, credit card debt, gifts from parents and career choices and plans. You handled money separately until now — what next?

We asked three financial planners what goes into the choice of merging finances or staying independent. Here’s the key takeaway: Try “hers, his, and ours,” with most of your money in the joint pool.

Three points of view:

• “Separate money allows couples to have some freedom. Giving each partner an allowance of sorts that they can spend any way they want without input, judgment, or the control of the partner can be a relationship saver. — Rick Kahler, Kahler Financial Group, South Dakota

• “It’s something you want to talk about. The pros and cons come down to the state and divorce law. If you keep a little money separate, you can surprise your spouse with presents. That’s a good thing, isn’t it?” — Chris Westerman, of Campbell Wealth Management, Old Town Alexandria, Va.

• “It’s nice to have some money separate as a psychological security blanket. But also nice to keep something together because if you don’t, it sends the message of less than a full commitment to the marriage. I’d recommend keeping your money primarily together with both spouses having full access to it. As a practical matter one person will typically take the main responsibility for paying bills and choosing investments. But the second person should know what’s going on and have a voice. The partner taking responsibility might print out reports encouraging the other to actually look at them. — Karl Graf, of Graf Financial Advisors, Wayne, N.J.    

READ: Having the money talk: Why you need to go bare about money

Graf offers the following tips:

Taxes:  Filing separately after marriage usually isn’t a good idea, unless one spouse has a lot of deductions, like medical expenses, and has a lower income.
Retirement: It’s best for both people to save, but if one spouse has much better investment choices or a superior company match in a 401(k) plan, a couple might concentrate savings there until they exhaust the full match. Some couples dedicate one salary entirely for savings and investments and the other person’s salary for living. In a divorce, a judge will split savings in retirement plans between the two by court order.  
Mortgage: If one person comes into a marriage with bad credit, spouses who can get a better mortgage might buy a house in their own name. 


Temma Ehrenfeld is a New York-based writer. After many years at Fortune and Newsweek, she now writes on a variety of subjects for The New York Times, CBS Moneywatch, Scientific American MIND and MS., as well as Dimespring.