When Americans marry, their finances usually do too: The majority of married couples put all their income into shared accounts.
In the 1970s and ’80s, not doing that was sometimes considered a bad omen for a relationship. But that’s no longer the case today. The share of committed couples, married or not, who keep at least some of their finances separate has risen in recent decades, in part because Americans tend to marry later, after they’ve already developed their own financial habits.
As norms have shifted, though, Americans haven’t reached a consensus on which financial arrangement is best for relationships. Respondents in a 2016 survey were split almost exactly 50–50 on the question of whether a married couple should merge all their money, and two titans of American personal finance give conflicting advice on the matter. Suze Orman has said she would “never, ever have just one joint account.” Dave Ramsey has dismissed arguments for keeping separate accounts as “a bunch of crap.”
The personal-finance experts I spoke with recently tended to side more with Orman, advocating for a “hybrid” approach—sharing some money and keeping some money separate. And although no single system is going to be best for everyone, I tend to agree.
The upside of couples combining all of their money is that it can promote a sense of unity, as “mine” becomes “ours.” More practically, pooling resources can buffer both partners from ups and downs that they may experience with their respective finances.
And surely, many couples switch to fully shared accounts simply because that’s how marriage has typically worked in previous generations. Of course, that precedent comes from a time when women were much less likely to do paid work than they are now. “As women are coming into relationships having their own income, that can facilitate the need for a conversation in the first place,” Joanna Pepin, a sociologist at the University at Buffalo, told me.
In fact, research indicates that couples who put all their money together are, on average, more satisfied with their relationship, and this pattern is especially pronounced for low-income couples. But that isn’t necessarily an argument for following their example, because this finding could mean that sharing money makes couples happier or just that couples who are happier to begin with are more likely to share their money.
Cassie Mogilner Holmes, a professor at UCLA’s Anderson School of Management and a co-author of a recent study on this subject, told me that despite the lack of strong causal evidence, she personally decided to merge most of her money with her husband’s after doing this research. “It creates a shared-ness,” Holmes told me of her experience. “It was a onetime decision that … plays out in a general sense of ‘we.’”
One commonly reported downside, though, of putting everything in shared accounts is that couples sometimes question each other’s spending decisions—did “we” really need to spend our money on that? Keeping funds entirely separate would preserve the financial autonomy that many people want and are used to from their single lives. But it would also do away with that appealing “shared-ness” Holmes was talking about.
Which is why the hybrid approach seems like a wise one. The basic idea is that a couple has a shared account to pay shared expenses, and then individual accounts for discretionary spending; they may have joint and individual savings accounts as well.This setup lets couples “feel like they are both working together to support each other and their partnership, while also giving each other some autonomy,” Paco de Leon, the author of Finance for the People: Getting a Grip on Your Finances, told me. “Partners shouldn’t have to have a conversation about every single purchase.”
This is the approach that Farnoosh Torabi, a financial editor at large at the consumer-technology site CNET, told me that she recommends for married couples as well as non-married committed ones. For the latter group, an alternative she likes is to keep accounts separate but establish clear rules for who pays which expenses. Torabi advised against fully merging accounts when one partner has significant debt, in order to head off any tension over who’s responsible for paying it.
There’s a bit of a debate about which system is more likely to lead to conflicts over spending, but the edge probably still goes to keeping some accounts separate. In 2011, in a series of articles in Slate weighing the merits of various arrangements, the journalist Jessica Grose noted that a hybrid approach means deciding, and possibly bickering over, what counts as a personal or joint expense. But when she adopted that system with her husband, she wrote, she was relieved that those conversations were not so fraught after all. (Ten years later, the couple is still happily hybrid, Grose told me recently.)
Meanwhile, “When you have one bucket, I think that’s where you have more of the ongoing squabbles,” Torabi said. “It’s like, ‘Well, I want to get a haircut’ or ‘I want to buy the newest technology fill-in-the-blank,’ and now I have to have a conversation about it.” (Plus, when couples don’t keep separate accounts, sometimes partners end up secretly squirreling away cash that they can control—which is really just a worse version of having a separate account.)
Another thing recommending a hybrid approach is that it’s clear-eyed about the possibility that a relationship might end. This doesn’t necessarily signify a lack of commitment, but rather merely an awareness that breakups happen. Indeed, access to cash during a separation is important, but Katharine Silbaugh, a law professor at Boston University, points out that having individual accounts “does not mean that at divorce you’ll each walk away with your separate accounts,” unless a couple signed a premarital agreement stating otherwise. “Every court in the nation has a legal standard by which they will take money that’s in one spouse’s name and transfer it to the other spouse,” Silbaugh told me.
Even during a marriage, the notion that you can keep your finances truly “separate” is to some degree an illusion—the money that a couple has, Silbaugh argues, is necessarily the product of joint decisions they make about where they live, who works for pay, whether they have kids, and how they share housework and care responsibilities. (In her view, trying to separate finances cleanly can in many cases be bad for women, because the money they personally accumulate doesn’t account for the disproportionate amount of uncompensated household labor that they do as a result of these joint decisions.)
The tension at the core of any financial arrangement—between autonomy and togetherness—is really just a reflection of the tension that’s at the core of marriage today: balancing being an individual with being part of a committed unit. The way you feel about this trade-off in the context of marriage might shape how you feel about it in the context of money.
Viewed this way, the differences between each financial arrangement can seem smaller, because couples can customize each one—say, by having shared accounts but adding a line for no-judgment spending to their budget so that they can each pull from the shared account guilt-free. Technology is further whittling away the distinctions between different arrangements: Couples with separate accounts can get matching debit cards from a new-ish company called Ivella, and any transaction with either card will pull from each partner’s account 50-50, or whatever proportion the couple chooses. It’s like having a shared account without actually having a shared account.
Different couples will have different preferences about what feels like the right balance of autonomy and togetherness, whether that’s a clever auto-splitting debit card or exclusively shared accounts. Torabi emphasized that, with any arrangement, couples should focus on making sure that each partner has access to money, control over it, and visibility into their overall finances. Beyond that, whichever choice couples make, they’d be wise to pick one that’s compatible with how they think about independence and togetherness, in the context of money—and of their relationship.
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