In Budgeting & Cash Flow

For many medical couples, combining finances might be a big mental hurdle to overcome once they tie the knot.

After all, you’ve been “on your own” through medical school, residency, or maybe even after training. You’re used to managing your own money, and you might even be accustomed to splitting rent, utilities, food, and other expenses while dating your other half or living together.

If splitting expenses has worked in the past, you might be wondering why you should switch it up after marriage. However, there are a few reasons why I think physician couples should definitely combine finances. Here they are below.

The ‘Till Death Do Us Part Thing

When it comes down to it, you make a vow when you get married and stand before your family and friends showing that you have selected your partner for life (forget the whole 51% divorce rate for a minute). You’ve also promised that you will support each other through better or worse and sickness and in health.

If that’s the truth, why would you want to complicate every financial decision for the rest of your live by figure out who is paying for what and when?

Think about this for a minute: if your significant other was to get into financial trouble somehow (the reason doesn’t matter), would you let them struggle if you had enough cash in the bank to help them out?

What if they got sick and needed a large sum of money to pay off medical bills? Would you  help them pay those bills to help make their problems go away?

I know that I will do anything for my wife, and if there is any way I can help her, I will. I think you would do the same. So, if you’re willing to help in time of need, why wouldn’t you help in good times as well?

Don’t have your financial guard up to the one person you love the most. Save yourself time by combining your finances and working together when it comes to budgeting and keeping an accurate log of your spending.

Time is Money, Friend

Speaking of time, couples that do not combine their finances seem to waste more of it than those who combine finances. The amount of time you spend analyzing who owes what and transferring the money is time you could be spending with your family or earning more by taking extra shifts or moonlighting.

If you’re thinking, “Ryan, you’re wrong. It doesn’t take that much longer; you’re being dramatic,” then hear me out for a second. If it only causes an extra hour a week (usually this ends up being more) of more work, that is 52 hours a year wasted.

What would you do with an extra 2+ days of free time? What memories could be made during that time? If my wife and I still had split finances, I would be thrilled to gain that extra time to spend with my kids.

This brings up another point: if you have or are thinking about having kids, this exponentially increases the chore of figuring out who is paying for what. Child care, diapers, clothes, sunscreen, toys, snacks – you name it, and it adds up. Actually, the expenses that come with kids seem never ending. Again, keeping track of these expenses and who owes what is daunting. It’s far better to work together and combine your finances.

Your Life is Complicated Enough

Mo money mo problems, right? Many physicians split their money between different institutions to diversify across banks. They might have cash reserves at multiple institutions in several different accounts.

However, the more you overcomplicate your finances, the less likely you are to stick with budgeting. After all, if it takes five hours a month to reconcile all your different accounts, you’ll dread the process and will eventually just stop.

This administrative nightmare is causing undue stress and anxiety and is totally unnecessary. Don’t make it harder than it is by having each person hold several different accounts. It’s far easier to have your accounts at one bank.

In fact, I recommend that you have one joint checking account and three different savings accounts (one savings account in each spouse’s name and one emergency fund.) When each spouse has a savings account earmarked just for them, it gives you both a sense of independence within the joint account. This should be a “no questioned asked fund” where each spouse can use their own savings money toward anything they like. They can even save it month after month for larger purchases.

The Verdict

If you are like most physicians I work with, you are just starting out, and your net worth is negative. You might be finishing residency or out practicing in your first real job and earning a salary.

If this is the case, you need to be focused on two things financially at this point: budgeting (i.e. living within your means) and paying off student debt.

Have a discussion with your spouse and decide which bank has the best services for your needs. Some common considerations should be which bank has a branch closest to you, which bank has the best online platform, and which bank as the lowest fees.

Once you have selected a bank, you both need to physically go in and open joint checking and savings accounts. Close the rest of your accounts at all the other institutions, and don’t look back. The only exception to this is if you have refinanced your student loans with another bank and they require you to have an account with their bank to qualify for the loan.

If that is the case, only keep the amount necessary to pay off the loan every month (with a month payment reserve if possible) and set up monthly auto transfers each month from your new joint accounts into the other bank. That’s it. Once this is complete, you’ll feel free; a weight lift off your shoulders, and you will gain free time to enjoy with your family.

Trust me; I’ve been there, and it’s an amazing feeling. Go ahead; open up that joint account. You and your spouse have been through a lot together as you’ve trained. Now, it’s time to work together and succeed financially as a team.

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