Combined finances can simplify budgeting, streamline bill payments, and foster a sense of shared responsibility and trust, while separate finances can offer more autonomy and individual control.
There is no right or wrong approach, it’s what works for you. Here are some arguments for each approach for you to consider.
Arguments for Combined Finances:
- Simplified Budgeting: Having one bank account provides a clear overview of combined income and expenses, making budgeting easier for both partners.
- Streamlined Bill Payments: Paying all household expenses from a single account simplifies the process and reduces the risk of missed payments.
- Shared Responsibility and Trust: Combined finances can reinforce a “we’re in this together” attitude, fostering trust and open communication about money matters.
- Teamwork and Shared Goals: It can help couples work towards common financial goals, like saving for a home or retirement.
- Equal Roles on Different Incomes: Even with different incomes, couples can find ways to share responsibility and have oversight of each other’s spending.
Arguments for Separate Finances:
- Individual Autonomy and Control: Separate accounts allow each partner to manage their own money, making decisions without needing to get approval from the other.
- Potential for Discretionary Spending: Separate accounts can provide funds for individual spending and activities, allowing for more freedom.
- Reduced Conflict: Separate finances can sometimes reduce disagreements about spending, as each person is responsible for their own decisions.
- Protection in Case of Relationship Issues: Separate accounts can offer a layer of financial protection if a relationship becomes unstable.
- May Promote Equality: Separate accounts can be a way for couples to ensure that each partner contributes equally to shared expenses.
So in summary
Option 1: Sharing everything. The “what’s mine is ours” approach pools both partners’ income, savings, and debts into one entity. Two people, one account. This blending often follows the logic that partners are putting their individual identities behind them in favor of a new identity as part of a couple. To many, this feels more committed, more binding. It’s also a more complicated situation to extricate yourself from in the event of a breakup or, worse, a divorce.
Option 2: Each partner keeps their finances separate. This is a safe option because, if the relationship doesn’t work out, each partner still has their own resources. It feels fair. It may seem especially fair if one person earns a lot more than the other or if one person has significantly more debt. But it also may feel like each person is more able to keep other options open and could decrease commitment to the relationship.
A popular trend is for couples to adopt a hybrid model and bring their finances together agreeing to collectively contribute an agreed amount into a joint account while maintaining their own personal account.
What does research and studies tell us?
To see if couples’ choices regarding pooling their money impact relationship satisfaction, in a published paper from 2022, researchers conducted six studies with more than 38,000 participants (Gladstone et al., 2022). Those six studies represented a variety of methods (e.g., cross-sectional, longitudinal, and experimental data sets) and were replicated in both individualistic and collectivistic cultures.
Their overall conclusion was that couples who put all of their money together were happier and less likely to break up, compared to other couples who kept some, or all, of their money separate. The benefits of combined finances apply to most couples but were especially strong for couples who had less money (either due to low couple income or money troubles).
Some more specific behaviors are also interesting. In particular, couples with shared finances reported more positive interactions and better connections, and they felt more stable. They showed this strong connection through their use of more pronouns like “us,” “our,” and “we,” and they were less likely to use “I,” “me,” and “mine.” Similarly, couples who pooled their money also used more language that emphasized affiliation such as “friend,” “agree,” and “kindness.”
The take-away from this:
While managing a budget isn’t one of the more glamorous or exciting parts of a new long-term relationship, how couples handle it is important. What makes it difficult is that the two options (separate vs. shared) both have logical common-sense arguments for why they may be effective.