10 Things You Should Know about Joining Finances in Marriage

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Couple drinking wine while cooking
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Money and love. Such powerful subjects on their own; combined, they can be explosive. So, when it comes to love, money and relationships, aren’t couples who pool their finances just asking for trouble?

There are plenty of couples who insist that keeping their finances separate is a key to their happy relationship. Some of the benefits, they say, are:

  • Each spouse gets some privacy and independence.
  • There’s less reason for conflict.
  • No one’s looking over your shoulder at your spending.

Most couples pool their money

All of that makes sense to me, so I was surprised to learn that most married couples in the United States do pool their finances. Still, that doesn’t mean that it makes them happier, does it?

“What has research turned up on the subject?” I wondered. I was in for another surprise: Research seems generally to show that pooling money in marriage makes a relationship more likely to last. Of course every relationship and circumstance is different, and there are good reasons why not every couple should pool their finances.

But, by and large, the jury seems to be in: Sharing is a good thing. Here’s what researchers and impassioned advocates have to say about pooling money in a marriage:

1. Separate money is linked to more breakups

For married couples, at least, “results show a strong association between moving money out of joint accounts, and consistently keeping money separate, and couple breakup,” say the authors of Money, Honey if You Want to Get Along With Me: Money Management and Union Dissolution in Marriage and Cohabitation, a 2010 report examining research about money sharing in marriage. The study was funded by the nonprofit National Center for Family & Marriage Research.

Most American couples pool their funds, the report says. And yet, in some subgroups the opposite is true. Separate money is the rule among:

  • African-American couples.
  • People who have remarried.
  • Unmarried couples living together.

2. Sharing control is a good thing

Another study funded by the same research center finds that sharing power, among other things, is good for marriage. And, as everyone knows, money is power. Here’s what Married Couples’ Communication and Resource Management Behaviors: Implications for Relationship Well-Being, says:

Overall, respondents tended to report more positive relationship adjustment when they and their partner pooled their money together, shared control of their money, engaged in more frequent financial management and positive communication behavior, and engaged in less frequent demand/withdraw behavior.

3. But you have to share equally

Pooling money can cause problems if you’re not sharing equally, writes Maryalene LaPonsie, in 7 Money Mistakes That Can Mess Up Your Marriage:

[P]lease, whatever you do, don’t divide your spending money as a percentage of your respective incomes. I’d wager that nothing chips away at the foundation of a marriage quite like placing a value on your spouse based upon what they earn.

4. Money fights happen regardless

Slate writer Jessica Grose polled 6,000 readers to learn about couples’ approaches to money and relationships. She found only “negligible differences in the amount of fighting among couples who pooled all their money, some of their money, and none of their money.”

5. Sharing forces you to commit

And committing “can itself create more love,” says Bloomberg writer Megan McArdle:

The harder it is to disentangle yourself, the harder you will work to enjoy what you have. The act of trusting everything to another person is the act of looking for all the reasons that they are trustworthy — accentuating the positive.

6. Separate money undermines the financial benefits of marriage

Before romantic love became a big reason for marriage, people married for practical reasons like physical security, financial stability, more prosperity for rearing children and the financial benefits of shared labor and shared overhead. The practical stuff may not be everything today, but it still counts for a lot.

If you de-couple money from marriage you eliminate much of the financial value of marriage, says writer James E. McWhinney at Investopedia.

7. Sharing your money makes you happy

Bloomberg writer McArdle talked with Michael Norton, who co-wrote the book “Happy Money:”

[M]uch of Norton’s research shows that we actually enjoy giving to other people more than we enjoy spending money on ourselves. We don’t think that’s the case — most people predict that they’ll enjoy selfish spending more. But when he actually gave them money to spend, and asked them to rate the experience, they rated the money they spent on other people more highly than money spent on themselves.

One reason sharing your money with your spouse is satisfying, McArdle theorizes, is that:

“… when you put all your money at your spouse’s disposal, it is something like giving the gift of all of your income. Of course, this only works with a spouse who gives that gift right back.”

8. Some couples share, but not everything

TD Bank surveyed about 1,000 Americans — married or co-habiting — to learn how they structure their bank accounts. It found that 42 percent have both joint bank accounts and also individual accounts.

Their reasons:

  • 38 percent (43 percent of women and 34 percent of men) said they like the independence.
  • 28 percent said their separate accounts were for emergencies and personal spending.
  • 16 percent like the convenience and say separate accounts make budgeting and bill paying easier.
  • 7 percent said they like the privacy.

9. There’s room for exceptions

Here’s a crucial exception to the principle of shared money: Keep at least one credit card and one bank account in the name of each spouse. That way, if your spouse dies or becomes incapacitated, or if you divorce (not that you’re planning on it, but it happens) you won’t be locked out of the ability to, for example, borrow money, buy a home, open a credit card or make a major purchase. Marriage and Credit: 6 Common Myths explains more about credit and couples and 6 Simply Ways for Newbies to Establish Credit tells how to start getting credit in your name.

Bloomberg writer McArdle offers some other exceptions: “[I]f you have an inheritance you want to keep separate, or your spouse is a potential defendant in a nasty lawsuit, then there may be good reasons for separate accounts.”

10. Pooling funds doesn’t stop financial infidelity

Pooling your money can have benefits, but it doesn’t make your marriage immune to problems. Three in 10 people who combined their finances with a partner admitted they had lied to their partners about money, found a survey conducted by Harris Interactive that was commissioned by the National Endowment for Financial Education. Another 32 percent said that they’d been lied to by partners about money.

Financial infidelity is an equal-opportunity sin. The liars were from both genders and all income groups. Among common money lies in relationships:

  • 30 percent hid a statement or a bill.
  • 16 percent hid a major purchase.
  • 15 percent kept a secret bank account.
  • 11 percent lied about debt.
  • 11 percent lied about how much they earned.

The last word

The last word goes to Washington Post money columnist Michelle Singletary. She is an outspoken, unapologetic advocate for shared accounts. Here’s her advice to her readers who asked about sharing money in marriage:

Lots of people have separate accounts because they don’t believe in “our money.” But me, I say put it all in one pot. Pay the bills together from that one pot and stop all the bickering about who should pay what or how much each should contribute based on what each makes. Selfish way to go into a marriage. In my opinion.

What’s your opinion and experience with money in relationships? Share with us in the comments below or on our Facebook page.

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