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Some couples prefer to completely merge their finances upon marriage, but this strategy doesn't work for everyone's situation and comfort level. You might want to keep your finances separate for certain reasons, such as if you have a blended family, have different spending habits or you have an inheritance to protect.
This doesn't mean you can't still split bills or work together on common financial goals, but there are some circumstances where money and marriage don't always mix well. Here are four reasons why you might not want to combine finances with your partner.
1. You Have a Blended Family
Budgeting for a family can look much different from budgeting as a couple or individual. If you or your spouse have children from a previous relationship, merging money can get complicated fast, especially if one partner receives child support from an ex (or pays child support). Blended families may also have to account for situations where the stepparent isn't contributing toward certain expenses or savings for their stepchild, so each parent's financial requirements will be different.
For blended families, keeping finances mostly separate can be a way to simplify parental financial responsibilities.
2. You Manage Money Differently
Opposites might attract, but if you and your spouse have opposite spending and saving habits, it could spell conflict. If one partner is more of an emotional spender, and one is more of a practical saver, it's easy to become resentful toward the other and play the blame game. Even if you're both spenders or both savers, if you prioritize or value different types of expenses, you might encounter frustration.
Financial incompatibility can be overcome. If you have your own incomes, you might find more peace by keeping your finances and budgets separate, and only combining money on joint efforts like saving for a vacation together.
3. You Each Want Financial Independence
The idea of combining lives and money is romantic to some couples—and downright terrifying to others. Some individuals may feel uncomfortable being financially beholden to, or responsible for, another person. Others may simply struggle with the idea of having to get someone's approval for spending, or they don't want to feel judged for their relationship with money.
Whether it's due to past experiences or just personal fears, it's valid to desire financial freedom and keep your finances separate, only combining money as needed. Remember, there are no rules saying you have to do anything, and it doesn't mean you love your partner any less.
4. You Have (or Are Planning to Have) an Inheritance
In most cases, if you inherit money or assets, it's considered your separate property. Even if you have a spouse, they are not entitled to it—as long as you keep it separate legally.
Some states are community property states, where most assets are by default jointly owned by married couples. Even in community property states, assets from before the marriage and inherited assets are typically considered separate property belonging to just that one spouse. However, if the person commingles the money with the partner, such as putting some of it in a joint savings account or going in on a house together, it then becomes joint property. If you end up divorcing, it can make dividing things especially complicated.
If you've saved up or inherited money before marriage, or you know you will inherit money in the future, keeping finances separate overall can provide clarity and peace of mind. A lawyer can also help guide you through taking the right steps to keep everything separate from a legal standpoint, and to ensure your wishes are followed in your estate planning.
How to Make Separate Finances Work
If you and your spouse have opted to keep your finances separate, it's still important to communicate and make a plan together. Here are a few ways to do that:
- Get familiar with your state's laws. If you're in a community property state, certain assets and debts are considered joint, whether you want that or not. You can override some of this with a prenuptial or postnuptial agreement, which allows couples to designate what they want to be separate and joint. You can also ensure you don't commingle funds that are separate from before the marriage or from inheritance.
- Decide on a strategy for bills. A tricky decision can be how you'll pay for joint bills. One option is for each partner to "own" certain bills. For example, one partner pays for cellphones and internet, and the other pays for power and water. Alternatively, you can split all bills 50/50. One way to do this is to have one partner pay bills and the other reimburse them for their half. Another way is to each put a set amount of money into a joint checking account every month, and then bills are paid from that.
- Tackle discretionary spending. If you keep your finances completely separate and only join forces for critical bills, you can handle savings individually. But if you go for a hybrid approach, you might share a checking account but maintain your own savings accounts. For example, perhaps you each divert a set percentage of income into personal discretionary spending, so there's no finger-pointing if one buys something the other spouse isn't thrilled about.
- Plan how you'll save. Similar to spending, it helps to decide where you'll combine efforts on saving and where you'll be on your own. For example, you could maintain your own savings account, while creating a joint sinking fund for long-term goals like buying a house and an emergency fund you can each pull from if necessary.
The Bottom Line
It's a misconception that getting married means you have to combine every single aspect of your life, or that there's something wrong with you if you don't want that. Whether you have a blended family, have incompatible spending styles, have an inheritance to protect or you just prefer more independence, you may find it easier to keep your money separate when you get married. After all, your credit score doesn't combine when you get married. Keeping certain things separate doesn't mean you don't love or trust your partner. It means that you've invested in making the best financial decisions for yourself and your future.