Most young couples must eventually decide whether to keep separate or joint financial accounts. We’ve discussed the pros and cons of each method, but we’ve never explored the practical considerations: how do you make each system work? More importantly, how do you make each system work well?

Recently, I’ve received a couple of questions about the details of combining finances. For example, Patrick writes:

I am getting married next year, and know that our W-4 forms should be adjusted affective January 1st.  However, I am getting mixed results from filling out a blank W-4 following the directions versus using the IRS calculator on their website.  What is the best way to account for the deduction change?  Also, what other things do we need to keep in mind when getting married?

Similarly, Lindsey is looking for advice on how to move from separate finances to a joint accounts. Her situation is complicated by her partner’s poor money habits:

What should you do if you and your partner decide to combine finances (checking accounts, credit cards, leases, etc.), but you, in the past, have had very different personal finance personalities?

I meticulously keep track of all my expenditures and income in a budget spreadsheet. I save all my receipts to check against my statements. At any given moment, I can probably tell you how much money is in my different accounts and how much money I have left to spend in a certain area each month (or for the year for more irregular expenditures). I have an emergency savings fund, a Roth IRA, and a 401K through my employer.

He basically lives paycheck-to-paycheck, has no savings, does not keep track of where his money is going, and has very little credit (which can be worse than bad credit!).

Though it may be best to not combine everything (or perhaps it is — I don’t know), we do want to combine. How do you recommend doing this? Is there a way to responsibly consolidate, or perhaps a happy medium?

Lindsey should definitely read the tips Sara Wallace offered last month in “When a Saver and a Spender Say ‘I Do’”. But beyond coming to terms with differences in money habits, what’s the best way for her to merge accounts with her partner?

To build a strong relationship, couples should strive for trust, honesty, and open communication in their finances. Without these three components, it’s difficult to work together as a team toward common goals. And note that there’s no one right system. It doesn’t matter what others think is best — what’s important is finding a method that works for your relationship. (In other words: Don’t let your father make you feel like a heel if you choose to do things differently than he does.)

But these are all platitudes. Patrick and Lindsey want real-world advice. How do you know what to claim for taxes? What are the steps to establishing joint accounts? If you keep separate accounts, how do you divide the financial responsibilities? If you’ve been with your partner for a while, how does your current system differ from the one you used when you began? What pitfalls should Patrick and Lindsey be aware of? Any tips or tricks you can offer?

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