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Merging Finances for a Better Relationship

Merging Finances for a Better Relationship

Over the last decade working with our Financial Planning Clients, we’ve had a number of occasions to encourage a couple to walk down the aisle. No, we’re not simply romantics (though certainly at heart!), but more pragmatic and realistic about the benefits and protections offered to married couples, still, over unmarried partners.

The other area of reflection for couples, married or not, is their approach to money management. Unsurprisingly, couples who meet later in life often struggle to integrate their finances, which can create mild to significant conflict over time. This includes the choice of using separate bank accounts, combining their accounts into joint accounts, or maintaining both separate and joint accounts.

Research into the question of whether merging finances helped or hindered a couple, often used survey data to determine whether the types of accounts used were correlated with their happiness. While these studies typically found that those with joint accounts were, on average, happier than those who kept their bank accounts separate, it's possible that couples who were more trusting of each other (which could lead to a happier relationship) chose to have joint bank accounts, rather than the use of joint bank accounts itself leading to greater happiness.

With this in mind, a group of researchers  sought to test whether there is a causal (and not just correlational) relationship between couples who merge their finances and happiness in the relationship. To do so, the researchers recruited 230 couples who were either engaged or newly married (all were first marriages) and had not yet combined their finances and divided them into 3 groups:

  • 1 group was told to keep separate accounts,
  • 1 was told to open a joint account,
  • the final group was allowed to make the decision on their own.

The researchers then surveyed the couples several times over the next 2 years and found that couples who were told to open joint bank accounts reported substantially higher relationship quality than the individuals in the other 2 groups. Given that the couples were assigned randomly to the 3 groups, this result suggests a causal relationship between having a joint account and happiness in the marriage (perhaps because having a joint account forced the partners to communicate more about income and expenses, or possibly because getting a more intimate view of their partners' financial activities built more trust).

In the end, the decision of whether to combine finances is both functional (e.g., whether to pay bills out of a joint account or separate accounts) and emotional (e.g., while some individuals might see having a joint account as a sign of trust, others might want to maintain a separate account to feel more independent). But this study suggests that many couples who do decide to use a joint account could be making a deposit toward the overall happiness of their relationship.


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