Newlyweds and merging finances To merge or not to merge? It’s time to make a decision.

The decision on whether to combine or keep your finances separate after marriage is one of the most interesting and challenging issues that is bound to emerge once you have tied the knot. However, it is one of those conversations that you shouldn’t dare skip for it may determine the success or failure of your marriage. 
Let’s face it. Most financial disagreements often lead to divorce. According to the results of a 2009 study, couples that routinely disagree on money matters at least once every week are about 30% more likely to end up getting a divorce compared to couples who rarely fight about such issues. 
Are you willing to go through the same fate as the others just because you cannot handle your money problems? To avoid such things from happening, you need to discuss how you, as a couple, should manage your finances even before you say your wedding vows. You need to come up with a decision on whether you would like to merge your finances, keep them completely separate or go for a halfway solution.

The Pros and Cons of Merging Your Accounts

Opening a joint bank account offers a convenient way to pay your bills without going through the tedious notion of determining who will pay for what. In addition, it also provides the following benefits:
  • It can strengthen your emotional bond. Merging your accounts can make you feel that you are actually married in every sense of the word and not merely living as housemates.
  • It increases your ability to secure future loans. Sharing a credit card and making timely payments can improve both of your credit scores.
  • It can make you eligible for bigger discounts and benefits. In some cases, having larger balances can make you eligible for better services and pricing on financial services. A larger savings account can give you higher interest rates while a larger investment account may make you eligible for lower interest rates should you decide to borrow against it.
  • It can generate huge tax savings. By filing a joint tax return, the spouse who earns the higher income will be taxed at a lower rate. As such, you can say that you can save money by getting married. You will also save a lot of time by filing a single tax return instead of two.
However, some couples feel that merging their finances is unfair, especially if one earns considerably more than the other and/or if one partner incurred a huge debt prior to marriage. If you feel the same way about merging your finances with your spouse, the best thing for you to do is to discuss the matter with your partner so that you can come up with a plan that will work for both of you.