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Merging Your Money as a Couple


Money, power and politics were some of the earliest reasons for marriage in Western civilization. Today those same reasons are among the leading causes of divorce.

“Interestingly enough, 60% of divorces are caused by money problems,” says personal finance expert Carol Pepper, author of The Seven Pearls of Financial Wisdom. “That’s the number one cause of divorce; it’s not infidelity, it’s money.”

And Pepper has seen plenty of it as an investment manager and adviser to families who have over $100 million in assets, which includes a role as portfolio manager with the Rockefeller estate, overseeing $1 billion in assets.

She explains that keeping track of your finances can be challenging, and when you add another person into the mix of bank accounts, bills, assets and investments, it could become an outright disaster.

On this Valentine’s Day, our Investing 101 series highlights four steps to successfully merge your money as a couple.

1. Maximize Your Incomes

“Once you’re together and you’re in love and you’re thinking like a team, really think about who’s the best person to earn money for the family,” says Pepper.

This means that if one spouse is earning a six-figure salary and the other is not, then this should be factored into the decision of who would stay home to take care of young children.

Think logically, and think about what’s best for your family.

“Rather than competing with each other, maximize your earnings together. Work together to make sure that you’re doing what you should be doing for your money,” she adds.

2. Control Your Spending Together

“One of the biggest places where we get a lot of arguments is in family budgeting and spending,” Pepper explains. “If you’re willing to start budgeting together and really do it as a team — and have his money, our money and my money (if you’re the wife) — then you’re going to be able to start getting rid of these money fights.”

Of course, this leads to the dreaded reality that you must know your significant other’s credit history. Are they deep in personal debt, student loans? Have they defaulted on payments? Do they have a clean tax record?

“Look at each other's credit reports before you walk down the aisle,” she advises. “And after you get married, you still want to make sure that your spouse is being responsible... He or she could be hiding things from you, but that credit report doesn’t lie.”

3. Invest as a Team

“Finance is a language. It’s not something you know intuitively,” says Pepper.

There’s often an imbalance of knowledge about finance. Maybe one spouse was a business major in college or works as an accountant, while the other is more of an artist who works outside of the financial realm. This shouldn’t stop anyone from being involved in money decisions, and it shouldn’t delegate the role to one spouse. In this economic and investing climate, it’s too large of a burden.

“If you’re the spouse that doesn’t know a lot about money, you need to get educated and you need to decide whether you have all joint accounts or my account, our account and your account. Both ways work for couples.”

4. A Couple That Donates Together, Stays Together

“This is another area where you can really have some togetherness, both for yourselves and with your children,” says Pepper, explaining that there’s a great opportunity here to teach your kids the importance of helping others.

She recommends setting up a donor advised fund — an account maintained and operated by a sponsoring organization with specific tax treatment.

“Most children have very loving hearts and they’d like to be involved in philanthropy,” says Pepper. “You can decide together, maybe you want to support children in Africa, maybe I want to support animals, and maybe the kids want to support some other cause. This way everybody can get involved and it’s really a lovely thing to do as a family.”

It’s all about love, family, and making money management a team sport.