How to successfully merge finances in marriage


Special to the Times-Herald

He’s a spender. She’s a saver. He likes risk. Her, not so much. Is this mismatch a divorce in the making? Differing financial habits need not portend a doomed marriage. With a few proactive conversations and a little upfront planning, the merger of finances can be a positive and productive step for couples entering matrimony.

Marriage counselors report that money is the leading cause of unhappiness; in fact, it’s the leading reason couples give when calling it quits.

Couples need to address the very core of their money-management habits to be truly financially
compatible. That includes issues like the perceived value of money, retirement goals, financial priorities and lifestyle.

To help make your financial conversation constructive and meaningful, focus on these five areas: transparency, joint goals, spending, debt and accountability.

1. Be transparent – Lack of honesty about current financial situations and individual goals and habits will lead to a breakdown of trust. If you are honest from the beginning, you will set an important precedent.

2. Set goals together – Meet with a financial adviser to set goals as a couple. Creating mutual goals places partners on a common financial path and gives them something to work toward together.

3. Avoid the urge to splurge – A newly combined income doesn’t equal more spending power. To have a stable future and reach joint goals, couples need to start saving right away.

• The earlier you start saving for retirement, the easier it will be to maintain a certain style of living later in life. Joint contributions to a 401k or IRA are important.

• When considering short-term goals, such as purchasing a home or car, determine what you need to save in advance to achieve those goals.

• Cut spending before having a family. The expenses associated with raising children will most likely be more than you anticipate.

• Start an emergency fund for unexpected bumps in the road, such as an illness or job loss.

4. Get out of debt now – Outstanding debt will prevent you from reaching financial milestones. Paying off debt in the first few years of your marriage will pave the way for future financial opportunities.

5. Assign responsibilities – Create a system for making financial decisions and completing tasks. Set up joint and separate accounts, and decide which partner will pay which bills. Remember to always consult your spouse before making a major purchase.

Meeting with a financial counselor can help you address and manage these important steps toward financial stability as a married couple.

(Charles Hoff is a financial education counselor for DFCU Financial, Michigan’s largest credit union with more than $3.5 billion in assets.)