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First comes love, then comes marriage, then comes… sharing finances.  It’s no longer MY money, it’s now OUR money.  You said “I do”, and now you need to share your dough.

When I got married, the idea of “shared” money was foreign to me.  I’ve never had to share with anyone before, and honestly it scared me.  The first few months my new bride and I decided to share money, we watched every penny the other one spent and it was driving us crazy, and driving us apart.

With a few changes, our financial life is in better shape than ever.  Below are the steps we took to get our shared financial life on course.  You may feel that the initial steps are a little much to do.  But after they are completed, things will be much easier.

The Secret

This whole process is based on one simple premise: shared money and separate money.  It’s the only way it will work.  Our shared money pays bills, covers dining out and groceries and other household necessities and sundries.  Some also goes to savings and to our vacation fund.  Whenever we want to buy something for ourselves we use our own money, and our spouse has no say.

Now link these credit cards to your joint checking account, so all payments come from the shared account.  This is the card you use when you go out for dim sum or buy those new throw pillows your wife couldn’t live without. And, when out to dinner with friends, you can pay with one card– and never have to be that couple who, after years of sharing floss and keys, still splits the dinner bill.

Individual Checking Accounts

Since you now have a joint checking account for your shared money, you should each have individual checking accounts for your separate money.  Most banks allow you to link the individual checking accounts to the joint account.  This makes moving money back and forth between accounts easier.  We’ll talk about that a little later.

Individual Credit Cards

You knew this was coming.  This is not mandatory.  But if you or your spouse need a credit card, you should each have your own.  You should be the sole owner of this card.  Your spouse should have nothing to do with it.  As with all credit cards, I would keep the maximum credit limit low.  Link your individual credit cards to the appropriate individual checking account.

Here’s a little chart to show the relationships between the accounts:

The Plan

On the first of every month we move some money from our joint checking account into our individual personal checking accounts.  This is our personal money, and It can be $100, $300, $500 or $1000 each; the amount will be different for each family.  This is your personal money and your spouse’s personal money for the month.   This is really important.  Though you are married, each of you now has some financial independence.  You each have a set amount to spend each month.  If you don’t spend it all, then it’s yours to keep.  We even have our own ING Direct Savings accounts.  Every month I move a little bit of my personal money to my personal ING account.  I want to buy a new iPod, so this is where it will come from.

If you need to spend more personal money than what you have in your personal account, that’s where the personal credit cards come in.  Perhaps one of you wants to buy a large ticket item and you don’t have the money in your personal checking account, then you can put this purchase on your personal card.  This becomes your responsibility to repay, not your partner’s.

This is just one example of a financial system for a married couple.  If you have another system I’d love to hear about it.  Please leave your comments below.