How to merge finances with your new spouse

Congratulations on your new marriage! After the partying has ended and the honeymoon period winds down, it’s time to tackle the pesky task of merging finances. This can be a tricky process: each of you has your own expenditures, savings and debts that may not mesh together as easily as you do.

So how do you navigate this? While each couple will have some challenges when navigating finances for the first time, there are some basic tips to help you tackle the first hurdles.

What should you merge and why?

Experts say that if you plan to merge finances, you should combine both checking and savings. A combined checking account will fund day-to-day household expenses for groceries, bills and other bills. The longer-term funds are to save for you and your future family.

Many couples tend to have tensions over money because they try to keep everything separate, but this just doesn’t work when you’re joined together and sharing in each other’s lives. Plus, no one wants their spouse to treat them like a college roommate collecting the utility bill. This doesn’t mean you can’t have your own personal expenses, but at least you can stay on the same page with some

Merging Made Easy

Don’t stress about what seems like a lofty project. Follow these steps and your funds will be married in no time.

1. List your expenses

The best place to start is to figure out how each of you spends money and if you can combine those expenses. Also think about where you plan to spend money together -- your joint discretionary expenses -- such as going out to eat or buying a house. With all of these in mind, you can get a better sense of how your money is going to fit together.

2. Make a financial plan

With most households nowadays having two incomes, it’s important that you are clear on what each of your money is going toward. Will you divide the income evenly, or will you split it based on your salaries?

If you divide evenly, keep in mind that he’ll be paying for her weekly nail salon visits and she’ll be paying for his rounds of golf. Going this route will require you to accept each other’s lifestyles and blend them together. But if this will cause issues, consider making a list of what each of your separate financial responsibilities are and what you will cover jointly. All of this can still be done using a joint account if you keep good records.

It's also important to decide who will manage the funds and the bills. Make sure you have each detail ironed out so the transition is nice and smooth.

3. Think about the long term

Make sure you also have a plan for what’s coming next. How will you pay off your debts? Will you help your spouse pay off a debt or are you responsible for the debt you brought into the marriage? You also want to think about kids, their college funds and ultimately your retirement savings plan.

Additionally, it’s a good idea to set up an emergency fund for any unexpected financial situations that might occur. Financial experts suggest having about three to six months’ worth of expenses to makes sure you have that buffer if something goes wrong.

4. Create a joint account

Once you have clear guidelines in place, you are ready to make that last step and put everything together. Having one account together comes in handy for all your expenses that you share, such as your house, utilities and cars. If you already use the same bank, combining will be really easy, but if you use different banks, you need to decide whose bank you’re going to continue with. The bank you choose will help you decide the best steps for closing one person’s account and adding those funds to the other’s account.

Consolidating your assets can seem intimidating, but the key to successful merging is to be transparent about where your money is going. Talk to your Middlesex County accountant to come up with an individualized plan for your financial future.