Money and Marriage: What to Talk About Before Merging Finances

One of the issues that comes up regularly as contributing to divorce is money. Before merging finances, in any partnership situation, it is important to consider that money will inevitably lead to some level of conflict. Before merging finances, it is a good idea to talk about a few things:

1. Spending priorities. It is a good idea to talk about what you like to spend your money on. After all, different priorities mean that you are buying different things. I like to travel, and would have no problem spending $1,500 on a trip. My husband, however, doesn't like travel. To him, a better use of that $1,500 would be a new TV. These are the sorts of things you need to look for and talk about before marriage so that you can come up with an equitable plan that takes both person's priorities into account.
2. Separate accounts. Not everyone has separate accounts. My husband and I don't separate our accounts. Everything we both make goes into the big pot. But this doesn't work for everyone, especially in today's world when second and third marriages create situations in which completely shared accounts just don't make sense. But a system does need to be worked out, preferably before merging finances, regarding how much each person will put in (some people use a percentage of their income as a gauge) the communal account (and there does need to be a communal account!), and how much is discretionary for each person.
3. Division of labor. This is a sort of extension of the separate accounts idea. It is important to discuss, before merging finances, who, if either of you, is going to be the primary breadwinner. It is also important to realize that if you decide that one partner will stay home, or that one will work part time to supplement, that it doesn't mean that partner has no say in money decisions. The division of labor in such cases is usually such that one person is doing a great deal of work, regardless of whether society recognizes it with monetary contributions. Remember to factor this in when considering finances.
   
4. Debt. This is a big one. Before merging finances, it is vital that you disclose how much debt you have. And you should realize that in most cases, debt becomes a joint problem. No matter who it "belongs" to. Smart Money points this out about debt and marriage:

Like it or not, once you're married, your spouse's debts can become your problem. Granted, you're not legally responsible for the credit-card balances ran up before you got married, or for any loans opened in your spouse's name alone — provided you keep your finances completely separate. ...But even with separate finances, your spouse's credit score will affect your ability to get joint credit. "It's a public [credit reporting] system, and what you do will absolutely affect the other," says Hayden.