There is a heated debate in the personal finance community about whether couples should merge their finances when they get married. I fall pretty strongly on one side of the line. If you are married, your money should be too. I believe fully merging your finances reduces money arguments and allows more time for talking productively about your money.
According to research, 42% of couples that have a joint bank account also have separate checking accounts. 14% of married couples having completely separate finances. The rise of individual financial accounts, particularly for women, is driven by a desire to maintain independence, according to a TD Bank survey. But what is this doing to relationships?
Fighting About Money: Normal Married Life?
A study by the American Institute of Certified Public Accountants (AICPA) and the Ad Council found that 88% of millennial couples who are married or living with a partner reported that financial decisions are a source of tension in their relationship. The survey also found that financial decisions caused tension in 20% of relationships on a daily basis and an additional 31% of couples felt the stress on a weekly basis. Yikes.
Another study from the AICPA from 2014 found that money is the number one source of arguments in the home, with 27% of fights related to financial matters. More than children, 16%, and household chores, 13%.
Even more shocking is the prevalence of couples who are hiding money issues from their spouse. 3 in 10 AICPA respondents admitted to have deceived their partner about money. A study by CreditCards.com found that an estimated 12 million Americans have kept a source of money hidden from their partners! I have a feeling they weren’t hiding that Wendy’s purchase in the middle of their Whole30…
The cost of not talking about our money
What are we fighting about? Why can’t we be honest with our loved ones? Well, less than half of adults married or living together set aside time to talk about financial issues on a regular basis. Couples very often aren’t on the same page when it comes to needs versus wants, how to prepare for unexpected expenses, or how to save. We aren’t communicating and our hidden feelings cause regular arguments.
Before diving into why I think merged finances do a better job of reducing arguments, let me start with the most important thing. Regardless of what you choose to do with your finances, if you don’t talk about it you are going to fight about it. No ifs, ands, or buts. Money is a constant part of our lives and if you can’t talk to your spouse about it, it is going to cause issues. Hopefully you discussed things before you got married, but if not, it is time to start now.
Why Merging Finances Reduces Fights
In my opinion, merging finances is the first step to bridging the gap. We have to open the lines of communication and be open and honest with our spouses about money. That is a lot easier to do if it is all sitting in one place. But there are other reasons too.
There is no such thing as separate but equal
Didn’t we put this to rest with Brown v. Board of Education? Sure, you tell yourself and your spouse that you will split all joint expenses equally or fairly and your separate accounts will be only for your own expenses. It is your money, you want to maintain the independence to spend or save it how you want. A good story, but it doesn’t actually work.
Over half of people surveyed felt like their family’s expenses weren’t split fairly. Separate expenses creates a mindset of “what’s mine is mine” instead of fully appreciating and accepting the maxim of “what’s mine is yours”. When your money is fully merged, you are each paying for your share of the cable bill because the payment is coming from one pool.
When things are separate, you spend precious energy trying to determine if each person’s contribution is fair. Either you are depositing amounts into a joint account for bills, which is tedious, or trying to pick bills each of you pays, which can breed resentment. You agreed 3 years ago that you would pay the cable and electric bill, and they would pay for homeowner’s insurance. But homeowner’s went up this year and now you’re bickering about whether the split is still fair. A real waste of time. Which leads me to…
You are only going to spend so much time talking about money. Make it count.
I noted above that over 50% of millennial couples argue about money on a weekly basis or more but that few couples have regular discussions about money. How often do you fight about money and then set a time to sit down and talk about it rationally? How often do you just try to get over it and move on? Unfortunately, probably mostly the latter.
If your finances are separate, you may spend 5-10 minutes a week (or more) splitting expenses or discussing necessary deposits into joint accounts. Plus, if you are the average couple that fights about money weekly that probably costs you 5-10 minutes of active argument or silent brooding. Lets target the low end and say you waste 10 minutes a week talking about money in an unproductive way.
By combining your finances and being open about money with your spouse, you free up time to have real discussions about money. 10 minutes a week, set aside on a regular basis when you can both focus on each other, could change your financial life. Starting from a point of “what’s mine is yours” puts you on the same plane and ready to work together.
Once you are working together, you may not even need a whole 10 minutes a week. Make it a monthly sit down and spend those extra 10 minutes as a family or snuggled on the couch. From fighting, to talking, to peace. All from getting on the same team.
Kids only make things more complicated. Learn how to budget together when they’re young.
It might be easy to keep your money separate when there are only two of you and joint expenses are predictable and regular. But kids make things more complicated. They grow out of their clothes at alarming rates, they need fees for soccer and field trips, they lose their backpacks. Do you really want to be fighting about who owes who money for your daughter’s Frozen lunchbox? Who has the time?
Research shows that couples fight more about money as they get older. This makes perfect sense as our finances get more complicated with age and we have less time. We are raising kids, trying to stay out of debt, and preparing for retirement. All while driving to piano lessons and Gymboree. But something else has changed. Someone is watching, and learning, from you.
Combining finances early on in marriage doesn’t just save you time. It allows you to practice having an open and honest money relationship before you are expected to teach someone else how to do it. You learn what you need to talk about and where your differences lie. Hopefully, by the time your little sponges are picking things up, they see you treating money as a family matter, not a cold war.
You still get to keep your independence.
When couples were asked why they kept separate finances the top answer for women was independence, while convenience was the top answer for men. Lets put the men’s answer aside for a minute (because how in the world is it easier to have two sets of finances than one?!) and focus on the ladies.
Mamas, I get it. We have worked our butts off to climb the corporate ladder. More women are breadwinners today than ever before and I happily count myself among them. But combining your finances with your spouse doesn’t give up your independence. You don’t become any less a fearsome #girlboss. You just set your spending money differently.
When you build your joint budget, put in monthly spending money for each spouse. Make it equal or adjust for personal needs. Whatever you decide, make sure both of you think its fair. Be sure one of you isn’t just avoiding an argument. For instance, my spending budget has $60 more than Daddy Fish’s because I need to get my hair cut once a month but cut his at home. Once you decide, agree that your spending money is yours. Does your husband want to nag you about the third box of quilting fabric that arrived in the mail? Remind him it is your money. And try to grant him the same courtesy when he brings home get another “rare” comic book or chooses to take his money to the casino with friends.
It Is All About Openness
At the end of the day, the best way to avoid arguments about money is to have regular conversations about it. Know your spouse’s money personality, their financial goals, and their money strengths and weaknesses. Understand that mistakes happen and try to approach both your own mistakes and your partner’s with grace. In my opinion, the best start to a happy money marriage for the vast majority of families is fully merged finances. You open your books to your partner, spend less time disputing regular expenses, and become a real financial team.
Do you and your spouse merge your finances? Why or why not? Let me know!
This post was proofread by Grammarly.
19 thoughts on “Marry Your Money: An Argument for Fully Merged Finances”
I don’t get why people wouldn’t merge their finances – if you marry someone, you are a team. Successful teams don’t put up unnecessary boundaries.
I do get it if one of the partners wants to have some spending money on the side and has a separate account, but there should definitely be a shared account.
Thanks for sharing
We have fully merged finances. I ‘keep the books’ but we have regular conversations to discuss. It keeps us on the same page and it is simpler in my opinion, and I’m all about keeping things simple.
That is how we run it too! We actually had to make a file with all our passwords and account numbers in case anything ever happened to me because while my husband knows our status from our regular discussions, I don’t think he has ever had to log into one of our financial accounts.
Same here Chelsea! As a matter of fact I need to update that file…hanks for the reminder 🙂
Yes! Love this. We discussed finances well before getting engaged, and opened our first joint account to use for our wedding expenses. That account transitioned into our primary account once the ink was dried on our marriage license. We make budgeting and paying bills fun, doing it together after walking for coffee to discuss. I can’t imagine the stress of separate finances!
I love the walking to coffee to discuss! What an awesome plan. Also, completely agree about the chaos of separate finances – I don’t know how people do it!
Thanks for reading and sharing your methods 🙂
That stats about the number of married folks that don’t have shared finances is surprising to me. I didn’t realize the numbers were so high. To me, the idea that a married couple wouldn’t merge finances is strange, but I don’t think those that don’t are doing it ‘wrong.’
My wife and I have stared our finances (and debts) from the start. To be honest, at the time nothing else was even considered. It was an easy decision for us. I would say that disagreements related to the fact that we have shared finances is rare at best. We talk about money a lot, and so perhaps that open line of communication keeps tension from building up.
I also found the numbers surprising! I wouldn’t go so far as to call it “wrong” as I assume there are people it works very well for, but the numbers do seem to indicate that for the majority of people, it is easier and less stressful to have them merged.
Great to hear that that you and your wife have minimal disagreements about money! I’m sure that open line of communication reduces tension.
Thanks for reading and your thoughtful comments!
I have never understood why married couples don’t merge finances. It boggles my mind actually haha. You’re a unit. We have always had our money together and I “do the books” at home but we make financial decisions together and always have, always will. Reading this made me super grateful for how much we talk about our financial state. Lord knows we have plenty of other things to worry about! thanks for sharing!
When I was researching this piece I couldn’t believe how high the numbers are for couples who fight about money. Definitely makes you thankful to be in a comfortable spot and have a healthy, open dialogue with your spouse!
Thanks so much for reading and sharing how you handle things!
This is a topic I’m extremely passionate about. There are far too many things that can be the topic for fights and worries in a marriage. There’s no reason to to not merge your finances. There should be honesty and transparency and if you leave an opportunity for secrecy, it can only create problems! We never once considered having separate accounts.
I’m such a huge fan of this. It’s created open, honest accountability and drawn us closer together.
We’ve merged finances ever since we were married over 15 years ago. At first we made roughly the same amount, so it didn’t matter. Now that I’m the breadwinner, it only makes more sense to have a single account.
As a divorce attorney, I always read these “marriage and money” posts with a really critical eye. Often, people are making assumptions about divorce laws that aren’t quite true. So I read every marriage and money post I see, but I go in with a lot of worry.
The worry was misplaced here! I appreciate your suggestions about how to handle the smaller money issues in marriage, like dividing bills. You talk about pulling these things from a common pool, which is actually largely how Mrs. Vigilante and I treat our finances. We each contribute to a joint checking account, as needed, an identical amount. We pay some things directly from it, and other things with credit cards (for the rewards) and we reimburse ourselves for the cost from the same joint checking. It has worked out extremely well for us so far, as everything is effectively split perfectly down the middle unless one of us ends up with slightly more in credit card rewards (which will generally be spend on trips that both of us will take, anyway!)
So glad I wasn’t stepping on toes of divorce law! I personally believe (and please tell me if I’m wrong!) that if your reason for not combining finances is concern about what happens in a divorce, you’re much better off getting a prenup than just trying to keep things marked yours and mine.
Interesting system for you and Mrs. Vigalante! Credit card rewards when you paid no interest to get them are the best. I love getting “free” travel! I’m curious, do you have similar incomes? It sounds like the method works great for you, which is what it’s all about, but am wondering how that system would work if one spouse out earned the other.
Thanks for reading and sharing such valuable insight!!
I agree wholeheartedly on the prenup thing. Not combining finances doesn’t protect you in divorce, anyway, with few exceptions. It offers only a false sense of security.
On the income question: Really freaking astute observation! That is exactly the point I didn’t address in my comment and thought about adding: Unequal income could be a potential source of problems for our system, since each of us splitting expenses evenly if one makes twice as much seems a bit “unfair.” It would put a lot more strain on the lower income earner to live a certain lifestyle, right?
Well, there are a couple reasons that isn’t a problem for us. One: We spend less than either of us net, anyway. So the strain caused by any
of that sort of unfairness isn’t significant, since we both have a lot of wiggle room.
Second: We have a common goal and we plan ahead so that our sharing of expenses is enabling us each to save more than we otherwise would be able to, while maintaining a higher standard of living than we’d otherwise be able to with that level of savings. For example, when I got a raise this year, I began to cover half our mortgage, enabling Mrs. Vigilante to max out her 457(b). Basically, my raise went straight to her savings, and it left both of us better off!
Right now, I do make more money than her, but not by a large margin. (The margin is growing quickly, though.) We split everything 50/50 except the student loans, which are mine and I pay them alone. Student loans are our largest expense – bigger than mortgage or taxes! After those loans are taken out, she actually has more net pay than I do. But it doesn’t bother me, and it won’t bother her when the roles reverse soon. Primarily because by splitting those expenses evenly we are enabling one another to save toward our common investment goal much faster. Also because my excess income will be going toward things that help both of us (like adding a deck onto our house, contributing to her traditional IRA), as I owe her money for the house.
Maybe it’s different in some states but here I’m in the hook for my wife’s spending regardless of what happens. Money is fungible so if she gets in trouble financially so do I. As such I don’t really see the point. The only valid scenario I see would be if it makes it easier psychologically to manage your numbers. I could see some scenarios where it would, it just doesn’t for me.
Great post. When we got married 2 became 1. Almost married 10 years with no financial stress. We manage our money together and compromise.
A decade without financial stress is an awesome achievement. Sounds like you and your wife have a great relationship!