12 Tips For Married Couples To Split Finances

Working On the Marriage | | , Writer
Updated On: October 6, 2023
Tips For Married Couples To Split Finances

When you get married, you promise each other to share each other’s happiness and sorrow, but very rarely do couples actually talk about how they will be sharing each other’s finances once they are married. It’s the last thing that is on their minds. How should married couples split finances? There are many decisions that need to be made when it comes to finances. You need to decide whether you want splitting bills based on income, you want to do it equally anyways irrespective of income or debt-wise, etc.

It is important to separate finances in marriage because this requires a lot of planning without which, you’ll become that couple that fights over money. There are ways married couples should split finances to sail through money matters smoothly. 

According to a study by the Kansas State University, money is the top predictor of whether a couple will get divorced.

Why Is Money Management Important In A Marriage?

We’ve heard about sexual and emotional compatibility when it comes to relationships but there’s another form of compatibility that is important in a marriage and that is financial compatibility. Money is said to be a major reason for marital distress. Money issues can even ruin a marriage. If one decision of yours can have a financial implication on your partner, it is important that such a decision is taken together. It is important for both partners to take decisions related to their day-to-day money management as lack of financial compatibility is said to cause a lot of stress in the marriage in the long-run.

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One partner’s wrong financial decision can lead to year-long debts and hamper your future. Married couples finance decisions should thus be taken together and splitting bills based on income is a good idea if both partners are working. That’s why it is important to know how married couples split finances. Coming to money management tips for married couples, money management should be such that it can pay off in the long-run. After all, you need to think about the future of your children as well. Moreover, it can also affect the emotional well being of the family. In order to get a better understanding on how should married couples split finances, here are 12 money management tips for married couples.

Related reading: Marriage and Money Problems: She was Calm but Something Was Amiss

12 Tips For Married Couples To Split Finances

How do married couples handle finances? Your marriage might be a 50/50 contribution or maybe a 60/40, but what is the ratio when it comes to splitting finances? Money management isn’t an easy process. It involves hours of planning and insights into each other’s financial condition. It isn’t just about paying the bills. It is about managing your individual finances along with sharing the load with your partner.

The question of what is Yours, Mine and Ours should be clearly answered when it comes to finances.

The 12 money management tips for married couples are as follows:

1. Write down your goals

Write down your goals
Write down your goals

It is important for you both to write down your short-term and long-term goals in depth. Ask yourself, where do you see yourself in five years? How many children are you planning for? In how many years do you want to pay off all your debts? How many times do you want to travel? Are you going to buy a new home in future? Most of these questions involve major financial decisions and based on these goals, both of you as a couple, can plan on saving money together to make smart financial decisions and tick off all your goals.

2. Consider opening a joint account

In addition to your individual accounts, making a joint account would be another feasible option. While opening a joint account could violate your sense of privacy to an extent, it will also build a sense of trust between you and your partner. Joint bank accounts can be used to pay the household expenses that may arise. Both of you can agree on a fixed amount to be contributed monthly into the joint account and can simultaneously pay off the expenses as and when they arise. This account could also help in splitting bills proportionately. Ensure to not use the money to spend irrationally.

Pros and Cons of a joint account: Well many couples are averse to having a joint account because then there are often fights over who spent how much from that account. And both partners get to see each others spending and there seems to be an accountability of your own income to your spouse. When a married couple is splitting the finances they can easily avoid the issues that arise from a joint account by ensuring that the account is used to pay for bills, rent, groceries and other household expenses and both partners have individual accounts that they could use at their will.  

3. Prepare a monthly budget

Prepare a monthly budget
Prepare a monthly budget

Prepare a monthly budget of all the expenses that take place during the month. Apart from household expenses, they may also include date nights, dine outs, food, etc. Not only will a budget help you in curtailing your spending, but it will also give you and your spouse a fair idea of where the money is being spent and in what proportion. A budget will help in setting a limit beyond which neither of you can spend and this could help a married couple to split finances without creating too much pressure on one person.  

Ensure to add emergencies in your budget such as doctor visits, repairs, etc.

4. Have an emergency fund

There is always a possibility for unexpected contingencies to arise. In order to ensure that these contingencies do not make you fall into debt, it is important to have an emergency fund to cover you for some time till things get back to normal again. Emergencies can arise any time. Uncertain incidents like an accident, job loss, natural disasters etc. may arise, and in that time, an emergency fund like this will be there to cover you both for a while.

Related reading: 12 Ways To Sort Out Finances In A Marriage And Grow Rich Together

5. Prioritize your expenses

As a couple prioritize which expenses need to be paid off first and which last. Based on these priorities you calculate your savings. Prioritizing expenses helps in paying off the important expenses first and considering whether the least important expenses can be avoided and saved instead.

Prioritizing expenses helps in identifying scope for savings.

6. Try your best to stay out of debt

If you both have any pending debt, it is important to focus on paying off that debt as soon as possible. As a married couple, you both are more responsible. Thus, ensuring that debt does not burden you for life is a priority. If you already have debt on your hand, try not to add more debt to your portfolio. Make a careful plan with your spouse, focusing on keeping debt out of your life. As once you both are in debt, it’s difficult to get out of it.

Related reading: How we divided our financial responsibilities after marriage

7. Clearly establish who pays for what

Clearly establish who pays for what
Clearly establish who pays for what

Splitting the finances means clearly establishing who pays for what. It’s not easy for one person to take care of all the expenses. There’s so much that needs to be done every month. From paying monthly bills such as the phone and electricity bill to paying mortgages, there’s a lot to take care of. Both you and your spouse can establish which expenses to take care of. This is when your individual goals become shared goals. Sharing expenses also builds a sense of trust and will ease the risk of losing track of expenses.

8. Making small investments

Both you and your spouse might be conservative when it comes to investing your hard-earned money. All investments aren’t risky. There are many investments that are secure and bear smaller or no risk. Instead of leaving your savings idle, consider putting them into short-term investments like recurring fixed deposits, mutual funds, systematic investment plans, etc. you can research more about them on the internet and take an informed decision. Such investments yield a significant amount of interest with a lock in period as low as 45 days.

9. Start saving

Start saving
Start saving

Couples these days believe in living in the moment rather than thinking long term. No matter which era you belong to, savings are important for married couples. Only when you save as a couple, you are able to fulfill your financial goals. Savings help in the time of emergencies or unexpected expenses and help you in tackling with them without it affecting your financial condition. Savings also help in planning long-term goals.

10. Track your budget

Just preparing a budget and splitting household finances doesn’t end the concern about expenses. It is important to track your budget and make sure that all expenses go as planned. There are various tools such as Tiller that help in making a spreadsheet that helps you track your monthly expenses. If you don’t want to be dependent on internet tools, track all expenses yourself by breaking them into categories and ensuring that the money spent does not go over the planned budget.

11. Avoid using credit cards

Credit cards are known to urge you to spend more than needed. People with credit cards often tend to spend more than their normal income which makes them pull strings to pay their bills. You both can end up in debt with use of credit cards. Avoid the urge to use credit cards. Instead, make payments using cash or debit cards.

12. Invest in a retirement plan

Invest in a retirement plan
Invest in a retirement plan

Being a newly married couple or a young couple, you might be hesitant to invest in a retirement plan. However, you both need to set retirement as a priority too. The earlier you start investing for retirement, the closer you’ll be to your dream after retirement. Before preparing a retirement plan, it is important for you and your spouse to discuss the age your spouse and you want to retire, what kind of benefits do you want from your retirement, etc.

Managing finances isn’t an easy task for a married couple. It involves a lot of planning and financial compatibility. It is important to reach a common ground when it comes to taking financial decisions. It is important to keep yourself informed about the various ways you can plan your finances. Sign up on financial planning websites such as Bloom, JagoInvestor, Mint, etc. for information related to financial planning. You can also hire a financial advisor to help you take decisions and reach a common ground when it comes to married couples finances.

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