Should couples consolidate their finances or have separate accounts? Studies show that one option leads to happier marriages.

Financial Planners

By Leslie Albrecht

Only half of couples discuss financial management before marriage

Hello. Welcome to Financial Face-off, the MarketWatch column that helps you consider your financial decisions. Our columnist will give her the verdict. Let me know in her comments if she thinks her opinion is correct. Also, if you have any suggestions for future columns on the financial faceoff, please email the columnist at

face off

Wedding season is here. Couples around the world are probably obsessed with the details of their wedding day, such as seating charts and first dance tunes. Unfortunately, many couples do not pay much attention to their financial situation before marriage. According to one survey, nearly half (49%) have not discussed how to spend money before marriage. Only 41% of people talk to each other about their salaries, and only 36% talk about how much they owe.

Not being open and honest about money is a sign that you don’t trust your partner, and could be the cause of your relationship breaking down if you have one. It can also mean an unpleasant shock. So, surprisingly, your soulmate has a credit score of 530. It ends up getting in the way of the dreams that her two love-crazy children created together.

One of the big decisions couples face when forming a household is whether to combine their money into a joint account or keep separate accounts.

why it matters

Paying your water bill on time isn’t the only way couples manage their money. Arguments about money can quickly turn into proxy wars over bigger issues in the relationship, such as who wields more power, whose career is more important, or who does more domestic work. I have. Money and how we spend it is also an expression of our values. And why are we in this relationship if we don’t share the same perception of our values?


Share the wealth. Use a joint account.

my reason

The number one reason for sharing money is that joint accounts are believed to lead to happier marriages. This reduces the chances of a financially devastating divorce.

There has been research to suggest that couples who share accounts are happier than those who don’t, but the association is merely a correlation, asking, “Does a joint account make you happier?” , or open a joint account for happiness” was not clear. Scott Rick, associate professor of marketing at the University of Michigan, said: He co-authored a new study that is the first to find a causal link between joint accounts and happier marriages.

Rick and his co-authors tracked 230 newlyweds over two years. One group of couples had to open a joint account, another group had to keep their accounts separate, and a third group could do whatever they wanted. Researchers contacted the couples every few months to ask how their relationship was going. According to Rick, couples who kept separate accounts or did whatever they wanted (most of whom used separate accounts) saw a “typical decline” in relationship satisfaction, with a higher rate of decline in early marriage. They were the happiest, and satisfaction declined after the honeymoon stage.

However, co-couples remained at their initial happiness levels and, if anything, their relationship satisfaction “seemed to increase very little over time,” he told MarketWatch. “By the end of two years, the couples who were living together looked a lot better than the ‘separated’ couples and the ‘do what you want’ couples,” Rick said. “Part of the reason was that co-couples had the same perception when it came to money issues, which caused some arguments. They started to see things better.”

“I want to get away from score management, which couples tend to fall into: ‘I did this yesterday, so today it’s your turn,'” he added. “Using separate accounts really gets you into ‘I paid for this and you paid for that’ score management. You get away with ‘his’ money and ‘her’ money.” We want to, and we want to get into ‘our’ money.”

Jenny Olson, study co-author and assistant professor of marketing at Indiana University’s Kerry School of Marketing, found that couples with combined accounts were “more likely to have joint reported higher levels of sexuality,” he said. work. “They told us frequently that they felt more ‘together’.”

If that doesn’t convince you enough, consider the fact that having a joint account can provide financial benefits. Keeping all your money in one bank may help you avoid minimum account balance fees and earn higher levels of customer benefits. “Consolidating assets helps us manage bills, plan for the future, manage emergencies,” says Woody Derricks, a certified financial planner at Partnership Wealth Management in Towson, Md., who specializes in same-sex couples. becomes easier,” he says. If one of them suddenly finds themselves in the hospital, having the money in separate accounts makes it difficult for the other to act on their behalf financially, Derricks said.

There’s also the estate planning aspect, says Kelly Long, a certified financial planner at Financial Bliss in Oro Valley, Arizona. It’s a lot easier, everything happens automatically.”

Another thing in favor of joint accounts is that sharing money helps control spending. “If you know you’re being watched, you might be able to exercise a little more restraint, and you might be able to cut back on more lavish spending,” Rick said.

Are my decisions the best for you?

On the other hand, keeping separate accounts might work better for some couples. Long’s parents have been married for 51 years and never shared money. They are both financially responsible, but have polar opposite personalities when it comes to money. One likes to waste, the other doesn’t like to waste, and there is also a disparity in income. Maintaining separate accounts was a “loving decision” that allowed them to “maintain maximum happiness in their marriage without changing their personalities,” Long said.

Financial planners say keeping separate accounts can also help if you met later in life and have established financial habits over the years, or if you had children from a previous marriage.

Another reason couples keep their finances separate in later life is to maintain a base of highly valued assets, according to Derricks. “If someone has owned a well-valued investment for decades, it should be possible for that spouse or partner to receive it on a full step-up basis if he or she dies first. And you might want to keep it in your own name so you don’t have to pay capital gains tax if you liquidate it after your death,” he said.

Couples can also experiment with a happy middle ground between cohabitation and separation, according to Rick. He would have one shared account for household expenses, and a separate account for personal expenses such as expensive hobbies. “Everyone needs their own room, or space,” he says. “Joints are definitely better than pure separates, but if you have the time and energy, I think it would be better to put separates on the joints.”

Tell us in the comments which option should win in this financial showdown. If you have ideas for future financial face-off columns, please email us at

– Leslie Albrecht

This content was created by MarketWatch operated by Dow Jones & Company. MarketWatch is published independently of The Dow Jones Newswire and The Wall Street Journal.


(Closed) Dow Jones Correspondence

05/13/23 1136ET

Copyright (c) 2023 Dow Jones & Company, Inc.

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