There has been a lot of chatter across the personal finance blogs about spouses combining finances. I have been shocked to see several of these popular blogs suggest that combining finances is not the way to go. A post at
http://www.thesimpledollar.com blamed combining checking accounts on not being able to pay a bill on time, and a post at
http://getrichslowly.org suggested that combining finances is not for everyone. I strongly disagree with both of them, and here is why:
First off, I will address the The Simple Dollar Blog post. The story goes that he needed to pay a bill, but because his wife had taken their checkbook with her that day he was forced to run out and buy a money order to avoid being late on the payment. While, he did manage to pay the bill that day, his being forced to use a money order had absolutely nothing to do with combining checking accounts with his wife. It has more to do with not being fiscally responsible in his household.
It doesn’t matter how much money you make, you should never wait until the last day to pay a bill. If you don’t have enough money in your bank account to pay a bill due that month, then you need to stop living paycheck to paycheck. Living within your means is something that I will harp on over and over, but it is the single best (and easiest) method for building wealth. Furthermore, a little planning and common sense would have gone a long way to avoiding this situation. Here are my recommendations.
- Use a credit card to pay your bills online
- Use a free online bill pay service from your bank (never pay for this service)
- Use your checking account to send an e-check online
- Have access to more than one checkbook
- One with him and one with his wife, or
- One with his wife and a supply of checks at home, or
- One with his wife, and a few blank checks in his wallet
- Pay your bills at least 1 week early, so that you can improvise when situations like this occur
In his book, “The Automatic Millionaire,” David Bach [
http://finishrich.com/pages/home.php] suggests using one of the above mentioned methods to automate your bill payments. It will work wonders for your stress levels and should avoid the possibility of making late payments. I recommend double checking that your bills are paid every month, because you can’t always predict when these sorts of things might go wrong.
Now, to address the second and more important of the two statements. I think it is always a bad idea to not combine finances with your spouse. You cannot have trust in your marriage unless you are on the same page with regard to your money. Not only that, but by combining your finances you will make better decisions with your money and will be less likely to be tempted by unnecessary impulse purchases. If you keep your finances separate, you will only do yourselves a disservice, and you will allow money issues to get between you and your spouse. If you keep your finances separate, how can you plan for the future? How can you plan for retirement, children, education, or the purchase of a home?
In the past, a huge part of combining finances was combining checking accounts. Before the internet, this was probably the most crucial step in joining your financial lives. I don’t believe that is the case anymore. What is much more important is that both partners own all of their accounts together, regardless of whether their name is on it. Checking accounts are merely containers in which you deposit or withdraw money. So are brokerage accounts, retirement accounts, savings accounts, and credit accounts. Between my wife and I we probably have more than a dozen accounts. Some are joint, some are not, but we are both responsible for the funds in every one of those accounts. Online bank account tracker
http://www.mint.com is a great tool for sharing account information with your partner.
I’ve established that the containers that hold your money are relatively unimportant, so that begs the question, “what IS important?” It’s pretty simple actually, from now on don’t think of your money in terms of “yours” and “mine,” don’t think of your bills in terms of “yours” and “mine,” and don’t think of your retirement as “yours” and “mine.” It is “ours.” The other important part of your financial lives is establishing a budget together. It has to be together, with each partner getting an equal voice, and you have to hold each other to the budget. If you break from the budget, you have to discuss it with your partner beforehand, and you have to figure out where the money is going to come from. I won’t tell you how to make your budget; maybe I will later if readers request it, but the most important thing is that you have one.
Do you agree with my take on combining finances? Discuss it in the comments and I would love to debate it.
