The Pros and Cons of Merging Finances

Posted by on Mar 11, 2016 in Real Estate | 0 comments


Managing money can be challenging enough on your own. Consider these points before combining finances with your significant other.

Whether you’re a newlywed or have recently moved in with your significant other, you two have a lot to decide about the best way to handle household matters. Figuring out how you’ll divide laundry duties, grocery shopping and other mundane responsibilities is a piece of cake compared to the big question: finances.

If you’re thinking about combining your finances, here are a few pros and cons to consider.


If you’re on the same page, with your short- and long-term financial goals synced up, and financial priorities fully aligned, there’s nothing more fulfilling than knowing you’re in this together via a complete financial union.

By combining all your assets and liabilities, you’re looking beyond your personal wants and needs, and ultimately making the commitment to succeed or fail — together, as a unit.

One of the benefits of joining accounts is that it makes bill paying and record keeping a whole lot easier (particularly if you’ve established a budget).

Furthermore, combining your loan accounts, such as credit cards, could help you get additional loans in the future.

And if you’re making consistent, timely payments, both of your credit scores will improve. If you had kept that credit account separate, only one of you would have the benefit of a higher score, which could hurt you down the road when you apply for additional credit.

Sure, filing separate returns may be beneficial in some instances. (For example, if one spouse has large medical bills and can meet the deduction threshold by considering only his or her income.)

But joint filing saves time, and possibly money, too — particularly if you both work and one of you makes considerably more than the other. Combining incomes could bring the higher earnings into a lower tax bracket.

Also, some tax credits are only available to a married couple when they file jointly. Talk to your accountant for additional information about minimizing the tax bite.


Some couples may not agree on certain issues, like creating a spending/saving plan, setting retirement goals, or even how much debt they should carry. After all, opposites do attract, and in many relationships, there is, in fact, a spender and a saver.

If your financial philosophies don’t align, and you’re combining your financial life with someone who has vastly different expectations, goals, systems, ideals and habits, this could bring challenges and unwelcome relationship conflict.

If you’ve been managing your money on your own for years, and have been relatively successful in doing so (from choosing your 401K funds to setting a budget to planning a vacation), you may not want to relinquish your financial autonomy.

Sure, there may be more bookkeeping for you to do if you keep your finances separate, and opt for more of a yours/mine/ours account type arrangement but it may ultimately provide you with the independence and comfort you desire.

You may be in la la land now, but what happens if the relationship doesn’t work out in the long run? Joint mortgages, credit cards, and bank accounts can be very difficult to separate, even with a formal court-ordered divorce decree.

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