You've cut the wedding cake and returned from the honeymoon, and now it's time to settle into married life. One of the most important decisions to make is whether you will have combined or separate finances. Although many couples opt to keep their finances separate even after they've said "I do," there are practical and financial benefits of getting married.
Combining marital finances produces one immediate benefit -- less paperwork. You receive fewer bills in the mail, or fewer email reminders in your inbox. You have fewer checking accounts to reconcile each month, only one season ticket subscription to maintain and only one bill for cable and internet service. Combined marital finances can even make paying federal and state income taxes a bit less of a headache, because you only have one set of books to consider when calculating deductions and credits.
Track Expenses More Easily
Budgeting in general is easier with combined finances. Because all the money goes in one pot, from which all the expenses are drawn, it's easier to determine which bills have been paid and how much money is available to cover remaining expenses. In addition, with combined finances, one partner can take over the finances for both of you, which eliminates the problem of one spouse writing a check and the other making an ATM withdrawal, which often results in checking account overdrafts.
Right of Survivorship
In the event that one spouse dies unexpectedly, having combined marital account facilitates the right of survivorship. A shared bank account would automatically transfer to the surviving spouse, who would have immediate access to the funds. Jointly held property, such as a car, would also transfer to the surviving spouse. By contrast, separate accounts may or may not transfer to the surviving spouse, depending on whether you've drawn up a will and the laws of succession in your state.
Combining your finances after marriage often allows you to save money by taking advantage of family plan options. For instance, a combined cell phone bill often provides more generous packages for talk minutes as well as for data transmission. Combining finances also allows you to pay fewer fees. Unless one partner has especially bad credit, combining marital finances may also allow you to qualify for lower interest rates. This can be especially advantageous for major purchases such as a car or a mortgage.
Even though we highlighted some practical and financial benefits, you may also want to consider 5 Steps to Take Before You Merge Finances with Your Romantic Partner. That way you'll be informed before you make any decisions.
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Get Rich Slowly: Which Should You Choose -- Joint or Separate Finances?
MsMoney.com: Consolidating Finances
TurboTax: Getting Married - Marriage Penalty or Marriage Bonus
U.S. News and World Reports: Marriage's Financial Pros and Cons