Getting married or entering into a civil partnership is an exciting time, but working out the mechanics of your finances is one of the biggest adjustments of married life and can present a lot of challenges. Many people decide to merge their money when they marry, either fully or partially, but every couple is different and the right arrangement is the one that works best for you and your partner. Whatever your solution, deciding what’s ‘yours’, ‘mine’ and ‘ours’ needn’t mean stress.
Merging your finances with your partner's may require you to change the way you manage your money and it may not be something you choose to do immediately
Merging finances
There are many reasons why couples decide to consolidate their incomes and savings. Rent and mortgage costs are often easier to pay from a joint bank account. Pooling your resources may allow you to share financial burdens and simplify things, and both partners will have access in case of an emergency. In the event of a disparity in earnings, you can both enjoy a similar lifestyle, and many banks have better savings rates for higher balances.
Merging your finances with your partner’s may require you to change the way you manage your money and it may not be something you choose to do immediately. Many couples begin their marriage with separate accounts and then find that later on – as certain events, such as having children, occur – it becomes more convenient to consolidate resources when you must rely on a lower combined income for a period of time.
Keeping separate finances
There are a multitude of reasons why couples choose to manage their finances individually. It often works for those who have different spending habits, for instance if one spouse is a spender and one is a saver. Another may be that one partner doesn’t want to burden the other with debt, or wants to keep their credit history separate. And, of course, it makes it easier to buy gifts for each other.
Keeping independent finances means financial independence – it can eliminate any disagreements over spending habits such as having to inform the other partner when you withdraw money. However, you may find it is more difficult to keep track of joint payments and you won’t be able to access money in your partner’s account if there is an emergency. You should also bear in mind that you may not benefit from the higher savings rates achieved by pooling resources.
Partially merging finances
You may prefer to opt for a ‘best of both worlds’ approach, which means partners maintain their own accounts for personal spending. You could both contribute equally to the joint account and then keep what’s left over in your personal accounts or some couples use a proportional system. For instance, if one partner earns two-thirds of the household income, they contribute to two-thirds of the joint account. Some couples put their entire income into a joint account and then transfer a fixed amount into their personal account each month, or vice versa.
There can also be arrangements where all money is shared equally between partners but responsibilities are divided. It can be easier to look after household money when it’s broken down into 'departments', with each spouse looking after a different area. To make a system like this work, you may want to identify each person’s strengths and assign responsibilities accordingly.
Things to consider
Any financial arrangement takes negotiation and planning. You could review your finances together and calculate your combined net worth to see where you stand financially as a couple. You and your partner may want to consider asking each other questions about your financial goals, your salary expectations, your assets, how much debt and how many credit cards you have, and whether you have retirement funds, savings and insurance. Honesty is key. You may want to review your credit history by obtaining copies of your personal credit reports and developing a plan to pay off debt, which might include consolidating your debts into one for ease of management: sites like Experian and Equifax offer free credit reports.
Check if you qualify for advice
If you have £50,000 or more in savings and investments, you may be eligible for HSBC Premier Financial Advice. See the full eligibility criteria.
If you don't qualify for HSBC Premier Financial Advice or if you'd rather not pay for advice, see other ways we can help.
Eligibility requirements
HSBC Premier Financial Advice is available to UK residents who have £50,000 or more in Savings and Investments and who are at least 18 years old at the time of the initial consultation.
You'll also need to have an HSBC Current Account or Savings Account for us to be able to deduct your fee. We can accept payment from a first direct Current or Savings Account too.
To find out more:
- See our HSBC Premier Financial Advice pages or;
- Call us on 0800 328 1298 to book an initial no-obligation consultation with an adviser. Lines are open Monday to Friday 8am to 9pm and 9:30am to 7pm on Saturday. (Textphone: 18001 0800 028 0126).
If you don't qualify for HSBC Premier Financial Advice, or if you'd prefer not to pay for advice, see other ways we can help.
If you are not a UK resident, see our HSBC Expat service.
