If you are one of registration number of Americans getting married in 2022, you may have started thinking about how you and your partner are going to manage your finances.
“I try not to be too preachy, but in my experience working with couples, in most good marriages there’s this feeling of ‘we’re completely in this together and we share everything'” , said Zachary Bouckmanaging director and chief investment officer at Denver Wealth Management in Greenwood Village, Colorado.
“A good household is a bit like communism,” says Bouck, who is a certified investment management analyst and advises couples financially. “If one person makes $50,000 a year and the other makes $200,000 a year, it all goes into the pot and is split equally.”
Deciding how to handle the money in a relationship with is “a very personal conversation,” acknowledges Bouck. Still, “most people who get married with the idea that they’re together for the long haul and end up sharing assets – in our experience, that seems to work a bit better than people who, from the start , try to keep things separate.”
Here’s the argument for mixing up your assets when you’re married, according to financial advisers.
“I would never go and say to a client, ‘You are terrible people. You don’t merge all of your assets, “because that’s a very personal decision,” Bouck said.
“But if a client asks me for my opinion and what I think: marriages tend to work better when there is no hiding of assetsyou don’t hide any account and you have full view of each other’s money.”
How you lived before you got married matters too. If this is your first marriage and you have a established career“and you’ve had separate accounts up until now, it can be very difficult for someone to give up the freedom to have 100% of their own checking account,” Bouck says.
Conflicts often arise because “the spending habits you had separately won’t necessarily make the other person comfortable,” like spending hundreds of dollars a month on clothes, for example. “So you have to sit and communicate about it,” Bouck says.
It is important for each partner to participate in financial planning and know what is going on with your money. “You owe it to your partner to have a financial date once a month,” Bouck says.
Amanda Clayman, a financial therapist in Los Angeles, agrees. Whether or not you decide to combine your finances, separate them, or share some of your money, communication about money is key, she says.
For start your marriage on the right financial footing, both couples should be involved in financial decisions and each partner should be transparent about their money. There must be flexibility to change, if necessary, and your system must be durable, says Clayman.
Often, Bouck sees clients who fit into the “nerd and free-spirited” dynamic, he says. “The nerd is the only person who will start paying the bills, he will make sure the taxes are paid, he will check the investment accounts,” he says.
A free spirit, on the other hand, is happy when “someone else pays the bill and, as long as his taxes are filed,” he says.
However, when you don’t take an active role in shared finances, you could end up burning out. The free spirit in this scenario “is the person who would be harmed in the event of a divorce,” he says.
Assuming joint responsibility from the start, even if one person takes the lead, can benefit both of you in the long run. “It seems when people have this mindset of ‘Of course we share our money, of course we share our debt, of course we share our assets’, it seems to me that that mindset is really, really, really helpful,” Bouck says.
In contrast, “when you have the opposite mindset of ‘Well, this is my money, and this is my inheritance, and this is your debt’, you sort of start keeping score in your mind in a useless way,” he says.
The article “In Most ‘Good Marriages’, Money ‘Is Divided Equally’, Says Financial Advisor: Here’s Whywas originally published on Growth (CNBC + Acorns).