Combining Finances after Marriage?

[vern]

Separate accounts!

[jrhampt]

Whatever works.  Some people in my family get manic about how separate finances means you're not committed and act like you're heading directly for divorce, which I think is ridiculous.  My spouse and I have been together for 15 years, married for 7.  We have a joint mortgage and a joint credit card for household expenses like groceries and home depot, but we own our cars separately and have separate accounts for everything else.  We split up the utilities, insurance, etc. so that each of us is responsible for handling and optimizing certain bills.  We each like managing our own investments.  We have named each other as the beneficiary on all of our accounts, and we have regular financial planning meetings where we set common goals, analyze spending patterns, and track progress.  It works fine.  We don't argue about money, and we're both pretty much on the same page.

[DoubleDown]

I'll probably get a lot of flak for this, but in my opinion (even from years of experience in an extremely happy marriage), not having a pre-nup is a symptom of financial immaturity. State laws about divorce don't make everyone happy just like state laws about estate transferal on death don't make everyone happy. You should have a pre-nup for the same reasons you should have a will.

No flak here, +1 internets for you good sir!

OP, it sounds like you're in a really good place with your fiancée. Coming into the marriage with pretty equal assets/earnings/debts makes things simple right now. It's really important though that you have a conversation with her about what she would expect when one of you dies, or if you ever divorced. It's probably easy to answer those questions now while you're young, but it will not always be that way. What happens if one of you gets rich, or a big inheritance, or someone gives up their career to raise kids for 10+ years, or one spouse wakes up one day and decides to run off with someone else, the kids, and half the assets, and oh by the way you need to pay them alimony for life?

Have those difficult "what if" conversations now, and put your mutual decisions in writing (i.e., a signed prenup). Don't rely on either of you doing the "honorable" thing 20, 30, 40 years from now. If either one of you hates the other enough to divorce, there may be little honor left, and you almost definitely will have different ideas about what is fair or honorable.

[earlybird]

Some very interesting responses here. I agree with a previous poster that it probably varies with age and experience. I married at age 25, DH 28. We were both just starting out in our careers and had joint accounts from the start, no prenup. At some point we got smart and did wills, living wills, and POA's. All this worked great for 20 years until he died from cancer. I remarried in 2013, both of us are in our late 40's. We lived together over a year before marriage. Being the very responsible people that we are, we had many discussions about money. We did a prenup and wills, living wills, and POA's. So far we've kept our finances separate since we each already had things set up the way we liked. I like my CU and he likes his bank. Same with CC's. Just recently we've discussed combining some things but haven't done so just yet. The main thing anyone should do is have the discussion about money and estate planning. Nobody likes to think about death but it happens, sometimes unexpectedly, as I can certainly attest. Make sure your goals are compatible as well as the way you attain those goals. Best of luck with your future marriage!

[RetiredAt63]

Caution: Inexperienced unmarried-but-living-in-sin here!
4. I was brought up never to rely on a man... I realise that as a woman who is planning to have children I am likely to lose out big time by not doing community of property. But eh.

Osprey, there is an old quote - "a woman is one man away from poverty".  That was back when married women could not have a job, their husband legally controlled the money, etc.  But even now, many situations need a woman to have her own financial existence.  So "not relying on a man" means knowing what is happening with the family finances, having some credit score of one's own, knowing that there is adequate life insurance on both partners.  How the day-to-day is handled just depends on how the two people like dong their paperwork.
You may want to find out your state laws re children - I am thinking death just as much as divorce, both leave the person looking after the children (not working, or lower income job) in trouble.  Legislation in these cases is a separate issue from the finances of the parents.  Good to know ahead of time what rules are there for you.  Actually, you are "common-law" by the definition of my province - you both should know what your legal status is for that.  Wills, power of attorney for both financial and personal care - these are pretty variable.

For the OP, the biggie is being on the same page for how you spend your money, how you save and what you are saving for, in other words being financial partners.  The more you talk about this before the wedding the better.  People change with marriage, all sorts of hidden assumptions come bubbling up.  And when/if children arrive and the working and family life arrangements change, then it all needs to be sorted out again!  Joint/separate accounts, etc., are just means to the agreed end.

[kendallf]

I've been married for 23 years, and married my wife when she was 18.  We had joint accounts for many years.  One of the best things we've ever done for our marriage was separating our accounts a few years ago.  There are no "One size fits all" answers to this question..

[Osprey]

...

@RetiredAt63 thanks for the good advice! We have our paperwork in order for these things but I sometimes feel that it is excessive planning on my part, especially compered to my peers. Good to know that actually I'm being sensible after all.

It's great to hear people's stories and opinions. More than one way to skin a cat!

[bikebum]

I think it depends on how you divide expenses and housework. Separate makes sense if both spouses work and split domestic duties. Combined makes sense if one is the breadwinner and the other contributes in a different way. All good as long as both spouses feel they are contributing equally. I've heard a lot of examples of both and I don't think one is generally better; just depends on how the couple wants to do it.

Another thought though: What does the law say about divorce in your state? Sorry to bring up the d-word! I think most states view assets and debts acquired during the marriage as both of yours, unless you have a prenup stating otherwise. So if you are married without a prenup, does it make sense to pretend your stuff is separate, since if you divorce the courts will view it as joint and divvy it up equally or equitably? (I mean you in a general way, not the OP or any specific person.)

In my opinion, it is smart for couples to talk about how to handle assets and debts during marriage and in case of a divorce, before getting married. If you don't like the way the law does it, you should probably get a prenup. I think the law is somewhat outdated here and doesn't work well for many modern couples. Probably set when it was very hard for women to make money, and they were expected to have kids and stay home with them.

[LauraG]

Another thought though: What does the law say about divorce in your state? Sorry to bring up the d-word! I think most states view assets and debts acquired during the marriage as both of yours, unless you have a prenup stating otherwise. So if you are married without a prenup, does it make sense to pretend your stuff is separate, since if you divorce the courts will view it as joint and divvy it up equally or equitably? (I mean you in a general way, not the OP or any specific person.)

My partner and I are legally married but keep our finances separate. We've talked about this issue and intend to not go after each others assets if we ever split up. I think we'd be decent enough to keep to that commitment. We have a few friends who were married and didn't go after each others assets when they divorced. (Obviously, if we were a different couple and someone had stayed home to raise kids (or cut back on their career) while someone else worked it would be fair to divide assets acquired during the relationship, but that doesn't apply to us.)

[bikebum]

Another thought though: What does the law say about divorce in your state? Sorry to bring up the d-word! I think most states view assets and debts acquired during the marriage as both of yours, unless you have a prenup stating otherwise. So if you are married without a prenup, does it make sense to pretend your stuff is separate, since if you divorce the courts will view it as joint and divvy it up equally or equitably? (I mean you in a general way, not the OP or any specific person.)

My partner and I are legally married but keep our finances separate. We've talked about this issue and intend to not go after each others assets if we ever split up. I think we'd be decent enough to keep to that commitment. We have a few friends who were married and didn't go after each others assets when they divorced. (Obviously, if we were a different couple and someone had stayed home to raise kids (or cut back on their career) while someone else worked it would be fair to divide assets acquired during the relationship, but that doesn't apply to us.)

That sounds good and you guys talked about it all first, although I wouldn't do it. Don't mean that as criticism for you, people should do what works for them.

Here's why I wouldn't do it:
If your getting a divorce it most likely means you are not getting along. Even if you still agree to not go after each others assets, it could put one spouse in an advantaged position.
Spouse A: "I want half custody of the kids."
Spouse B: "Well I am the better parent, and I'm legally entitled to a big chunk of your retirement account so you should be happy with what you get."

Also, if any family members or friends get involved, they may convince one spouse they didn't get a fair deal during the marriage and should be compensated, even if the couple had a solid verbal agreement about everything.

Unpleasant stuff to think about, I know. But it seems there are so many couples who love each other so much while together, and then have a nasty divorce. Good to know some of your friends were able to work it out.