Marriage Finances: Together or Separate?

Marriage Finances: Together or Separate?

Marriage Finances: Together or Separate?

Justin Lavelle
September 10, 2016

Managing money is an important issue for every married couple.

Whether one spouse has a high income and robust net worth (or not) isn’t as important as if each party is in agreement on how money will be managed within the marriage. Each of us have our own ideas about money and how to handle it. It’s an issue that is major cause of divorce. How can you have the blissful marriage you thought you’d have when money is an issue? Well, we’ll leave that question to be unrealistically answered by Hollywood movies. But we can explore some of the pros and cons about merging finances or keeping them separate after tying the knot.

Keeping finances separate

The Pros: Having some financial independence could mean avoiding petty money arguments for couples. In a relationship, there may be the “saver” and the “spender”. Making your spouse feel guilty for indulgent purchases is just as bad as acting as the penny-pinching police – when it comes to your relationship. Each individual has his or her own spending habits, so to avoid arguing over how to spend or save, couples may keep separate accounts for peace and harmony. Keeping separate accounts also improves the chances that each party will be financially literate – which may be important if divorce should happen.

The Cons. If keeping finances separate, a couple needs to agree and commit on how each will contribute to shared expenses. Good communication is always key in a relationship, but having the right kind of communication about finances is especially important if your accounts are separate. Financial independence may mean maintaining your own identity, but this could also lead to money secrets; which are definitely not good for a relationship.

Merging finances together

The Pros: As a married couple, you are making a commitment to each other – for better or for worse. Putting your money together in one pot could mean more transparency in working toward a common goal together. You may be more inclined to work as a team and compromise your own wants for the needs of what is now your team. If both spouses are contributing to the same pool, it may lessen the stress over who pays for what. When responsibilities are shared, the commitment to reach goals and pay bills may seem more mutual. This can be particularly useful for spouses with wide income disparities, where keeping finances separate could result in a hardship for the lesser earning spouse.

The Cons: When all resources are pooled together, managing it all could, inadvertently, end up on one spouse’s lap. It doesn’t create a fair balance in a marriage when the day-to-day management of household finances is the responsibility of one spouse. The benefits of teamwork and trust in having a joint account are lost when this happens. It’s also important that when one person takes on the debt of their spouse, that they see it as “their” debt. Having joint accounts may also become stressful if one person takes on debt from their spouse and later feels contempt. And joint accounts are no guarantee against money secrets, particularly if one spouse is disengaged in the process.

Whichever choice is better for you as a couple, remember that communication and compromise are key elements in building that as-close-to-blissful marriage you both want.

Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.