Should Couples Combine Finances? Yes. 5 Good Reasons Why

By Chika


Last Updated: December 19, 2022


When couples make the enormous, life-altering decision to share their lives, they are faced with a mundane question that has huge ramifications: Combine finances, keep them separate or do a combination of both?

Figuring out your finances is an integral part of beginning any life partnership. How you handle your finances depends on other aspects of your relationship.

Given that money is a particularly pervasive and recurrent source of marital conflict, the manner by which partners keep their money may prove important to maintaining harmony.

While many young people believe that keeping money separate is the way to go, new research suggested that couples that combine finances last longer and live happier lives.



Studies on Couples Combining Finances

In a study titled “Pooling finances and relationship satisfaction,” researchers found that couples who pool their finances are less likely to break up than couples who keep their finances separate.

In a 2021 survey it was discovered that 43% of couples who are married, in a civil partnership or living together have joint assets.

There are also generational ramifications to couples pooling their resources together.

  • Baby boomers are most likely to have only joint accounts, with 49% 
  • Gen Xers with 48%
  • 31% of Millennials

Compared to previous generations, Millennials get married later in life because among other reasons, they choose to focus on building careers first. As such, many of them cohabitate before marriage.

Because cohabiting couples are far more likely than married couples to keep finances separate, a certain inertia develops. When they do get married, it may be difficult to change the way they view finance as a couple. 

Pooling resources as a couple also show disparate levels across income groups and cultures. For example, couples in low-income couples tended to see greater benefits of pooling their money. 

The same also went for couples in more collectivist versus individualistic cultures. Couples that live in countries that have individualistic cultures like the United States were more likely to keep their finances separate, than those whose countries have collectivist cultures like Japan.



5 Reasons Why Couples Should Combine Their Finances

1. Greater feeling of accountability

Combining financial resources leads to a greater feeling of accountability, since each half of the couple can observe the other’s spending and saving habits more closely.

In a survey that examined how couples' individual financial decisions varied based on whether they were making purchases from separate or joint account, researchers discovered that those who spent money from a shared account tended to choose more "utilitarian" goods rather than "hedonic" ones.

In one study, for instance, individuals using a joint account more frequently selected a coffee cup over a beer tankard because they thought the former was a more practical purchase.

As such, combining financial resources together may be the plug many people need to live a more frugal lifestyle and imbibing better money management attributes.


2. Increases communication

Money is an emotional topic. So, its expected that when couples combine money there is bound to be a lot of interaction surrounding it. Open communication about finances can help couples reach their financial objectives. This is because it may increase the likelihood that they are on the same page.

People who discuss money openly also often manage their debts better than those who don't.

The practice of hiding information or transactions from a spouse, known as financial infidelity, is less likely to occur in relationships when there is open communication about money.



3. More firepower to handle life's changes

Relationships are all about supporting each other in times of need.

You might decide to enroll in graduate school, experience a medical emergency, or unexpectedly need to buy a new car. Curveballs are inevitable, but they aren't necessarily unwelcome. When funds are kept separate, these curveballs can sometimes be more difficult to handle.

There is less chance for conflict when everything is separate (in two pots), and there is less individual sensitivity to your partner's decisions because there is no structural demand that you communicate and coordinate.

However, you forfeit the benefits of "pooled risk," and your team is less adaptable to changes (such as one partner wanting to return to school, or have a baby, etc.).

You can better prepare for these occurrences, which might require some additional financial support, by pooling resources and assets. By having a joint bank account, you may avoid any additional arguments that can arise from your partner paying "your" expenses or transferring money into your account.


4. Create a sense of equality

Combining financial resources not only promotes balance but also a sense of security.

Your joint income pays for your shared house and a sizable chunk of your lifestyle rather than two separate paychecks. If both of you are employed, your wages don't have to be exactly the same. But combining your finances gives you and your spouse a fresh financial starting point.

You and your partner can define what equality means personally to you two, not just what is conventional or customary. Choose what is "fair." Does fair mean proportional (one contributes a proportionate amount based on their income) or equal (both contribute 50/50 to shared expenses/accounts)?

By thinking of money as "our money" rather than "my/your" money, this might substantially alter one's perspective.

This can also level the playing field with inherited riches, such as a trust fund or significant property, allowing both spouses to prudently plan on incorporating that legacy into their joint future.


5. Can save more

Compound interest causes your interest payments to rise if you have a joint savings account. You continue to deposit the same amount that you did before to merging your funds.

Many online banks feature savings programs with interest rates significantly greater than the average, which for savings accounts is 0.09% APY. In either case, it makes sense to combine these aspects of your finances so that you may increase the return on your retirement savings.



Final Thoughts: Should Couples Combine Finances?

It might be worth pooling your money, though. Shared finances may help you build a stronger sense of togetherness, helping you grow your savings faster through compound interest.

Combining finances also makes paying bills easier and budgeting more also helps you navigate curveballs that life throws at you, creates an atmosphere of equality and fosters communication.

However, while the advantages are obvious, you should only take the plunge if you are sure of you and your partners goals and values are aligned. Mixing money with emotions leads to disastrous financial decisions. As such, while you may consider combining money with your spouse, you need to considered it deeply before you commit.

 You can test your partner's financial fidelity while dating. Start with smaller projects or goals and see how it progresses. This would give you an idea of their notions about money. It also lets you know what to expect if and when you get married. 

Photo by cottonbro studio


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