I'm Getting Married — Do I Have to Combine Finances with My Partner?

A relationship therapist breaks down the pros and cons.

Money Power Struggles
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DEAR DR. JENN,

My fiancé and I are getting closer to the big day and have not come to an agreement on how to combine our finances. We both have a lot of emotions about it when we talk about it. He thinks that we should do what our parents' generation did and combine everything, but I want to have separate accounts. What should we do? —Mo Money, Mo Problems

DEAR MO MONEY,

In my clinical experience, different arrangements work best for different couples. Figuring out what is right for you is likely to be impacted by your socioeconomic background, how your family handled money, the disparity in income for you and your partner, and how you view money and partnership, amongst other things.

A recent study from the Journal of Personality and Social Studies found that couples who choose to pool all of their resources experienced greater relationship satisfaction and were less likely to break up. This was particularly prevalent amongst lower income couples which makes sense since combining assets improved quality of life for both parties.

That said, it probably comes as no surprise that younger couples tend to view the joint accounts of their parents and grandparents as an outdated concepts — and are statistically less likely to combine assets in that traditional way. According to a survey of couples who are married, in civil partnerships or living together, by CreditCards.com, 49% of baby boomers (58-76 year olds) have joint accounts compared to 48% of GenXers (42-57 year olds) and 31% of millennials (26-41 year olds). Not to mention, many younger couples come from divorced families or nontraditional families with parents who never married. These couples are likely to have more autonomous ideas of how to handle finances in a coupledom. They are also more likely to have a prenup, which are no longer only a document for the wealthy.

To combine or not to combine?

So, is this new modern approach the best for your relationship? Well, maybe. Statistically speaking, money conflicts are one of biggest harbingers of doom in a relationship. According to a Utah State University study, couples who reported disagreeing about finances once a week were over 30% more likely to get a divorce than those who reported disagreeing about money matters a few times a month. One of the most common financial conflicts I see in my psychotherapy practice amongst couples is arguments over spending. Typically one person in the relationship is upset by a purchase that the other has made that they view as frivolous, extravagant, or unnecessary. This is where having separate bank accounts can really come in handy.

That said, as a psychotherapist (not a financial expert), I recommend a blend of the two. I prefer for couples to have a joint account that pays for day-to-day living expenses like rent or mortgage and groceries. At the same time, I like for couples to have their own individual accounts. This is each person's discretionary income that allows them to make fun purchases that the other might judge and also allows each person the ability to buy a surprise gift for the partner without getting a text message asking, "What is that purchase you just made at Best Buy?"

When there is a disparity in income, couples can agree to put a certain percentage of their incoming money into the joint account and the remainder into their individual account. For example, both partners put 80% into the joint account but get to keep the other 20% in their personal account. Other couples may decide to set an agreed-upon number that feels right for each account.

At the end of the day, I believe it is important that couples have a sense of "we are in this together" that comes with a joint account — but also have autonomy. It is too easy to control or feel controlled when everything comes from a shared account. This tends to create a lot of power struggles, whereas having a joint account with individual accounts strikes a balance that I believe is key to minimizing conflict.

It's all about transparency

When couples are creating a life and a future together it is important to be transparent, open, and honest about finances — past, present, and future. There is a lot of shame and secrecy for most people when it comes to money. I have seen too many couples lie about student loans, credit card debt, or income in order to seem like a more financially desirable partner. But this does harm to the trust in a relationship. You cannot work together towards common goals — personal or financial — as a couple, if you don't truly know what's going on in your relationship.

In its extreme, dishonesty around money can actually be financial infidelity, which can be just as damaging to a relationship as actual cheating. Financial infidelity can include spending money (for instance, with a secret credit credit), borrowing money (or otherwise incurring debt), or holding secret stashes of money, without the knowledge of your partner. This is more than just "Honey, I've had these shoes forever" while you hide the delivery box. (And no, I do not recommend these smaller lies either!) Financial infidelity, on the other hand, is deceitful on a grand scale and typically has a long lasting and oftentimes devastating impact on the financial life and trust level of a couple.

To promote this transparency and trust, I recommend that couples have weekly business meetings. This allows couples regular check-in time where everyone can be aware of how much is in any and all bank accounts, and make decisions around investments, savings, vacations, big purchase decisions, etc. These meetings should be limited to 20 minutes at a time so they don't become something you dread every week. It's also an opportunity to evaluate what is working and not working in the way you are running your financial life together.

At the end of the day, you have to decide what is best for your relationship, but in my expert opinion, by having joint accounts and individual accounts you get the best of all worlds. As long as you are both aware of where all the assets are, are working together towards common financial goals, and are honest with each other about your spending, you'll be creating a great foundation for a long lasting marriage.

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