Op-ed: My bank, their bank or our bank

Wedding and engagement season is right around the corner and that means many couples will embark on a path toward marriage.

One of the most important conversations newlyweds will need to have is figuring out how and who will pay the bills. The goal is to ensure the bills are being paid, especially on time, so the couple remains current with their finances and that means keeping their credit intact.

Money may not be the most exciting topic to discuss with your new partner, but it is a must. According to a recent study by the Institute for Divorce Financial Analysts, 22% of all divorces are due to money issues.  Having a plan and an active dialogue can help strengthen your bond as a couple.

The way couples approach and accomplish this task can be extremely personal and the end goal can be reached in so many ways.

No one way is the right way, and we will explore some of the more popular ways we have seen this accomplished.

Many couples find it best to address their bills like they have approached their marriage: They look to commingle their finances like they have their lives.

Taking this approach, the couple would set up a joint account for their bills where all the income they receive would be deposited. That joint account would then be used to pay their bills and fund their emergency and other savings accounts. This provides a fair amount of transparency to both members of the relationship to see how much money is coming into their account each month and where it is going.

Some couples would rather not combine their finances in the way previously described, and would prefer keeping things more separated.

We have seen couples that have separate accounts where their respective pay is deposited. The couple then will agree to divide certain household expenses for which they would be responsible.

One member may be tasked with paying the mortgage, taxes and insurance, while another may pay for the groceries, utilities and maintaining the home. Using this method can provide the same level of transparency for each spouse if that is what the couple wants, or it could also be used to keep things a bit more private.

Another method we see as financial advisors often combines some of the first two ways discussed.

In this situation, we see each person maintaining their own accounts and they each contribute a determined amount each month to a joint account. The joint account would be used to pay all the bills for their collective household. 

Usually, one member of the couple would take the lead to make sure the bills are paid and other times we see them divide this responsibility. This provides each person the ability to maintain their own accounts while giving the couple transparency around the household bills and what it costs to run it monthly.

Bills and paying them are a necessary evil for any couple and how it gets done can be quite different from one household to another. Whatever method you choose, whether it is one outlined here or something very different, it is critical that it works for you both.

There must be an agreement, similar to so many things in a relationship, between the two people or it simply is not going to be followed.

Once that is in place, you need to ensure that it is being followed, the bills are being paid and they are on time, too.

Paying the bills on time will save you the nuisance of paying interest and late fees, which could add strain to your relationship. Another major benefit is to make sure your individual and credit as a couple is maintained or increased to the highest score possible.

Having great credit, which is helped by paying your bills on time, can have a positive effect on your financial situation.

Having a plan and sticking with it is very important. But it is also important that you check in with each other over time to confirm that the current plan is still working for you both. There may be times in your relationship, based on your situation as a couple, that you may need to adjust your approach. Be flexible and as transparent as you can as a couple, and this will only lead to enhancing your relationship.

In the end, financial planning is extremely personal, and you need to find and follow what works best for you.

— By Lawrence D. Sprung, a certified financial planner and founder/wealth advisor at Mitlin Financial Inc.