Should couples keep their finances separate or combine them?

You’re married or in a committed relationship.  Inevitably this question of money comes up: should we combine our finances or keep them separate?  In my experience, the answer really is the all-to-common “it depends.”  It depends on your personalities, spending habits, attitudes about money and extended families – among other things.  Here are some of my observations.

Let’s start with the simplest scenario: A young couple with no children.  This is generally the easiest situation in which to blend the finances.  Each person comes into the relationship with few assets and no dependents – which eliminates most of the issues that cause disagreements.  Even so, one person might be a “spender” and the other a “saver.”  In this situation, what often works is to have a joint account as well as separate spending accounts to put some controls around the spending.

Second marriages can get messy when people start with assets of their own and/or kids of their own.  Regardless of how committed this couple is to each other, completely blending the finances can cause conflict.  If the kids are very young, blending may still work as the priorities in this situation aren’t much different than the young couple with no children.

If the children are well into their teens or in college, it is rare that both parents feel the exact same financial commitment to their spouse’s kids as they do their own kids (not something they will usually admit to!).  If both people earn their own income, often what works is that they keep a good deal of their money separate, pay for their own kids with that money, and share in household expenses.  If one person earns all or most of the income, then the higher earner needs to be amicable to paying for the expenses of his/her spouse’s children.

The above scenarios are some of the most common I’ve seen, but by no means all of them.  There are so many varieties of relationships, personalities and family structures that come into play when making these decisions.  There is no right answer for all situations.  The most important thing is open communication to eliminate resentment – a definite destroyer of relationships.

As an article in U.S. News & World Report points out, there are many reasons for couples to keep join accounts - or not.