Should I Combine Finances With My Spouse?

should-i-combine-finances-with-spouse

The couple that manages money together … stays together? That’s the question a lot of newlyweds ask themselves after tying the knot.

Money issues are notorious for causing stress in marriages and sadly are even cited as a leading cause of divorce. Managing your money as a team can help you tackle those issues together, and can actually bring you closer. In fact, researchers across five studies found that committed couples who pooled their money into joint bank accounts were happier in their relationships and were less likely to split up than couples who had separate accounts.

As you decide how to combine finances after marriage, here are some important things to keep in mind.

Pros and cons of combining finances with your spouse

While there are distinct advantages to managing your finances together, there are some downsides to consider.

Pros

  • It’s easier to track expenses: When you have joint accounts, tracking your household expenses is simpler than having separate accounts. You can just look at your bank or credit card statements and see exactly how much you spend as a household on groceries, entertainment, or insurance. It’s easier to set and maintain a budget and manage your spending.
  • You can see your progress: If you have debt, such as student loans or a car loan, you can quickly see your progress as you make payments. With separate accounts, you don’t have access to your spouse’s debt and are unable to see if payments are making a dent in your household debt.
  • You have access to communal cash: If you need cash, you can get it when you need it from your joint account without asking your spouse for their debit card. And, if your spouse is unavailable or — in the worst-case scenario — incapacitated, you won’t face any legal hurdles to access the account.

Cons

  • You can see each other’s transactions: When you share an account, you can see how much you each spend. That issue can start fights if your spouse disagrees with your spending choices. But it can also cause more mundane issues, like your spouse being able to see when you purchase a birthday present for them. Seeing each other transactions can ruin the element of surprise.
  • You may have different priorities: When you have joint accounts, it’s essential that you share the same financial priorities. Otherwise, you’ll run into conflict. If you’re focused on paying down debt, but your partner wants to spend money on travel, they may be irritated when you dedicate your extra money for the money toward your loans. Open communication and alignment on your joint goals are key.
  • It can be messy if you separate: If you combine your finances, it can be more complicated if you separate or divorce. If it happens, you will have to divide up your accounts, including your assets and debt, which can be a lengthy legal process.

Is spouse student loan consolidation a good idea?

If you’re combining your finances after marriage, you might be thinking about refinancing your student loans to save money or to accelerate your debt repayment. One frequently overlooked option is spouse student loan consolidation. Consolidating your debt with your spouse’s loans can be a smart strategy for the following reasons:

  • You can simplify your payments: If you both have student loans, juggling multiple loan servicers, payment due dates, and minimum payments can be confusing. By combining student loans with your spouse’s debt, you’ll have only one loan to manage and one easy payment.
  • You may lower your interest rate: When you refinance your loans, you may qualify for a lower interest rate. If you have student loans with high interest rates, refinancing can help you save thousands of dollars over your repayment term.
  • You can reduce your monthly payments: By refinancing your loan to an extended repayment term, you may be able to reduce your monthly payments and free up more money each month to pursue your other goals, like building an emergency fund or saving for a home.
  • You can pay off debt faster: By opting for a shorter repayment plan, you can ditch debt more quickly — freeing up your finances and saving you even more on total interest costs.

If you think that spouse student loan consolidation sounds like a good fit for you and your partner, there are two different approaches to consider: 

1. Spouse student loan refinancing

PenFed Credit Union is the only lender that offers spouse student loan consolidation. With this option, you can refinance your student loans together. Your loans will be combined, and going forward, they’ll have the same interest rate and term. You’ll have just one monthly payment to remember, and one loan servicer.

With spousal loan refinancing, PenFed looks at your combined income and the higher credit score between the two applicants. If one person is non-working or makes substantially less than their partner, spousal loan refinancing can help them qualify for a lower interest rate than they could get on their own. 

2. Traditional student loan refinancing with the spouse as a cosigner

Another option is to apply for a traditional individual refinancing loan but to have your spouse cosign the loan with you. When your spouse cosigns the loan, the lender will take their credit and income into consideration. Having a cosigner increases your odds of qualifying for a loan and getting a lower interest rate on a loan. More lenders allow for refinancing with a cosigner than spousal loan refinancing, so you may have more options if you go this route. However, only the primary applicant’s loans will be refinanced — not both your loans like in a spouse loan refinance through PenFed.

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Comparing rates and refinancing your loans through Purefy

Whether you decide to pursue spousal student loan refinancing or traditional student loan refinancing with your spouse as a cosigner, it’s wise to get multiple rate quotes before submitting your loan application.

With Purefy’s Compare Rates tool, you can get quotes from top student loan refinancing lenders in as little as two minutes, without affecting your credit score.