When Nia Darville Stokes-Hicks and Armondi Stokes-Hicks got married two years ago, they set up five bank accounts.
Each had separate bank accounts for personal spending and shared a checking account to pay household bills. They had joint savings accounts. And they had yet another account about the money the couple had set aside for use together. According to a YouGov poll conducted three years ago on CreditCards.com, 34% of couples have mixed accounts and 23% have completely separate finances.
According to the Census Bureau, maintaining individual accounts is more common than before, as American couples are married later in their lives. By the time most people reach their late 20s and early 30s, they may have been working for over six years, have set up their own check accounts, establish credits, and own a home or securities account. there is. Many people want to maintain their financial independence after marriage, but this is not necessarily a good idea, especially when experts are thinking of long-term goals like savings for retirement. I say that isn't.
“We got married soon after the couple left school, opened their first bank account together and learned how to manage their money together,” says Bill Nelson, founder of the Pacesetter Plan in Arlington, Virginia. said.
Having separate accounts makes it even more difficult to see the overall financial picture of a household, says he is a production assistant for a former Netflix author who works as a Starbucks supervisor and lives in Jefferson County, Colorado. Stokes-Hicks said. He and his wife agreed. Last year, I was using my credit card to make payments using my household bill account to simplify my finances last year, when I realized I wasn't using individual bank accounts.
Currently they share three accounts: a high-yield savings account, a checking account for household bills, and another savings account. Both are enrolled in employer-sponsored retirement plans.
“I think it's much easier to achieve your financial goals when you're all working in the same direction and you both have all the information,” says Dyville Stokes Hicks. (27) said. and Director of Inclusion.
A 2024 survey by Wallethub found that nearly one in three people thought sharing financial accounts would increase conflicts, but the study believes the opposition is true.
A recent study published in the Journal of Consumer Research found that couples with collaborative accounts tend to be happier and more committed than those who do not. Financial mergers encourage couples to coordinate financial goals and build tougher bonds when working together to save for home and retirement, research says.
“We've been working hard to get the better of our business,” said Jenny G. Olson, an assistant professor of marketing and one of the authors of the study at Indiana University's Kelly School of Business. However, she acknowledges that there may be issues with the joint account, such as a relationship with domestic violence.
Dr. Olson said most couples should consider setting up a joint account, as it helps them make informed decisions and create a “our” perspective. Individual accounts can lead to a “you and me” perspective and potentially lead to misalignment of financial goals.
As long as they exchange financial information, couples who are separating finances can work towards shared financial goals.
“No matter what financial agreement you have, as long as you feel transparent about it and others are included in your knowledge, you have the beginning of a successful relationship. “I said,” said Kathryn Smurling, a family therapist in New York City.
Manage your money together and separate
Carlisle and Shawn Button lived together for several years before they married five years ago. After they got married, they didn't combine their accounts, but each added the others as certified users for emergency purposes.
“I think it came from a place where we have individual finances as adults before we lived together,” says Button, head chef and kitchen manager at the brewery in Henderson County, North Carolina, where the couple lives. said.
Ms. Button (30 years old) pays utilities, internet and phone bills, but Button takes care of car payments and car insurance, and for large joint purchases like the new car he recently bought. Deposit periodically into a savings account. They pay for the groceries in turn. They each pay for their favorite streaming and subscription services, such as YouTube and Xbox. The only bill they split evenly is their rent.
“We've seen a lot of fun and hard work,” said Ms. Button, who works as a bartender at another Henderson County brewery. “I'm not necessarily good at thinking about savings as the bill itself.”
The buttons keep accounts separate, but they jointly file taxes and share with each other how much they earn. They also discuss financial goals, such as car savings. Button contributes to her retirement account, and Button is registered on an employer-sponsored retirement plan.
However, the couple does not discuss their purchases themselves. When bills are paid and money is saved, each person is given the authority to buy whatever they want with their paycheck, Button said.
It is difficult to suddenly have to ask your spouse to have permission to spend money after someone becomes financially independent. If couples want to maintain financial independence, Brandon Welch, financial advisor at Newport Wells Advisor in San Diego, recommends this approach. Set up a joint account for household expenses and set up basic donations regarding each individual's total income. Couples must also agree to joint goals such as savings for retirement, home or university funds for children. Whatever the remaining money is, individuals can enter each person's separate accounts for their choice, he said.
Mistakes and solutions
It is to have each spouse fully transparent whether the couple combines accounts or separates them completely.
“As a couple, there should always be a way to see the entire family's financial snapshot,” said Pacesetter Planning's Nelson. For example, couples can create spreadsheets to track income and outflows, or use budgeting software. Couples with separate finances that do not discuss income and savings risk eroding their long-term financial goals.
For example, if a partner pays significantly more household expenses than an individual's income, it could hinder a couple's ability to save money for retirement, says Financial Advisor of Epolit Financial Strategy in Chelmsford, Massachusetts said Michael Carbon.
In households where couples have different incomes, it is not uncommon for higher earners to donate the maximum amount to retirement savings, but low earners struggle to do so. .
By looking at household finances overall, couples split bill payments fairly, maximizing both spouses' retirement savings, especially when high earners cover more shared expenses. can. Couples will not only save more for retirement, but will also reduce their taxable income.
“I think a lot of people underestimate the power of tax deferral accounts,” Carbone said.
Another potential mistake couples make when maintaining separate accounts is replicating emergency funds and linking together better investments or savings.
“If each person does it separately, they can basically double what they need to reserve in cash,” says Montrose, Colorado's founding Approach Financial. Justin Pritchard, the person who is a member of the world, said. The biggest contribution to the 401(k) plan or opening a tax-deferred health savings account, he said.
Maintaining individual finances can hide potential economic vulnerabilities and give couples a false sense of overall financial situation.
“If one partner is struggling and the other partner is doing well, then the one who is doing well might think that everything is keen on pink, but the other one barely does that I make it and take on debt,” Pritchard said. It can also give a false impression to a partner who earns less money as a couple is struggling.
As a bartender, Button relies on tips and often earns less in the winter, Button said. When her salary drops, he pays most of the bill.
“You have to trust your partner,” Button said. “To know that they are responsible at a level like yours.”
