Should couples merge their finances or keep things separate?
20 years ago, merging finances after becoming a couple wasn’t something people thought about much. Most of them married young and quickly opened joint bank accounts, got a mortgage in both names, and shared credit cards.
Younger people are marrying less and less these days, and when they do marry, they're generally older than in generations past. It’s also much more likely that both people will work and have their own sources of income.
As well, with common-law relationships becoming much more common, the whole 'merging-money' issue is simply a little more complicated than it once was. If you get together when you're older, for instance, you're likely already financially established and merging your finances may seem like too much trouble.
That's the rationale for keeping most of your finances separate, except for perhaps one joint rent/utilities account to which both people contribute equally. Other times, each person picks certain bills and expenses to pay for -- which may not necessarily be equal.
If they do merge at all, some couples do so proportionally. If one partner earns two-thirds of the household income, say, she contributes two-thirds of the joint account. After funding the joint account, both partners can do whatever they want with the balance.
One thing is sure though. If one of you has a problem, everybody has a problem. Money resentments tend to spill over and spoil relationships.
How do things work in your house? Are you happy with such an arrangement? How have things changed over time?
By Gordon Powers, MSN Money
Posted by: Nibuts | May 1, 2021 8:47:01 AM
No for most cases. Guess most agree.
Posted by: GenXer | May 1, 2021 9:08:59 AM
My husband and I have been married 16 years. From the first we set up joint bank accounts and treated all income as 'ours'. In the early years, he made more $$$ and helped me pay off my credit cards which i had stupidly racked up to $3K as a University student. As the years went on, i gradually made more money than him. Last year he made a complete career change to being self employed and it will take time for him to generate income this first year. I support him 100% in this change and him being home all the time is wonderful for our two sons. The money is still 100% shared although there is much less of it at the moment. I have faith that will change and he can end up making a lot more than me in his new career. We will continue to keep our joint accounts and share everything, that is in my mind what marriage is all about.
Posted by: Teamwork | May 1, 2021 9:38:53 AM
We have a joint savings/chequing account and share 2 credit cards. Discuss major purchases. Always worked well for us. No financial surprises. Married 31 years today!
Posted by: Careful | May 1, 2021 10:10:59 AM
Just came out of a common law relationship where 2/3 of my house was paid off when we decided to move together. 8 years later we decided to build our dream home where i took all my equity and put it into this new house. Of course over the years we shared expenses proportional to our salaries but unfortunately three years later things didn't turn out as they were meant to be and we put the house for sale. We had to split 1/2 and 1/2 all profits made on the sale no matter how much more i had into the house. Good thing we had a cohabitation agreement for my RRSP and pension plan cause that would have had to be included into the split also. Lawyer fees to try to get back my equity from my first home would have been much more than what I actually gave her so i just decided it was in my best interest to just let it go. We would have had to amend our agreement once we were in the new house to protect my equity which I hadn't got around to doing cause I never thought it would happen. This is just to show that even though you may be going into a common law relationship with all the best intentions, anything can happen and you'll end up back to square one.
Posted by: Married and Screwed | May 1, 2021 11:50:11 AM
Married 12 years ago, my wife made 1/4 of my wage. That's now changed to 1/8th. She's very traditional, so most everything is merged. Technically, I carry pretty much all of the payments and major purchases. She gets to buy whatever she wants and keeps total control over the finances and cash flow. Very rarely do I get an allowance, or to make a major purchase for myself. In her mind, though, she 'contributes equally'. Whenever I confront her on this, or ask for a change, she goes into a frenzy and threatens to leave. (Of course, in a divorce I'd have to again pay her almost half of my salary to support her! Ironic, isn't it?)
That being said, she is pretty good at saving money and 'being cheap'. So while she's not 'financially savvy' when it comes to investments and leveraging money, we've maximized what we do have. She is also very cheap when it comes to spending on herself, so no lavish shoe or clothes buying sprees. I'm a bit traditional myself, so I agree with shared assets and liabilities, as you're supposed to be a team. I also have no quarrel with giving her anything she wants, so long as it makes her happy. Which is why I've never 'put my foot down' and taken an allowance or made a big purchase. So long as the Love is there, there's not really much of a problem.
Posted by: Lou Garou | May 1, 2021 12:02:49 PM
@Married&screwed.......your avatar pretty sums it all. One thing I did when I got married; PRE-NUP!! My friends all thought I was crazy and selffish.....until she decided to end our marriage to find herself. The same friends then patted me on the back telling me how financialy smart i was.
Posted by: CityGirl | May 1, 2021 9:32:21 PM
I haven't had to cross this particular bridge - yet - but I often think of what I will do when the time comes. I've always been careful with my finances and made a few good moves in real estate, so I've got a healthy portfolio. I worry about having to split my "stuff" with anyone that comes along and will most certainly get a cohabitation or prenup (whatever the situation may be). I think the main difference is that people are getting married later in life and as such will be entering in to a relationship with more than what would have been the case than if they were in their 20's. I think keeping separate finances is fine but remember...just as much as you have to split the profits in a divorce/separation, you will be splitting the debt too! So be aware of what's going on. My advice - sit with your partner and talk about finances BEFORE you move in together.
Posted by: Bill | May 3, 2021 7:59:54 PM
My wife and I have everything joint. We will never divorce, under any circumstances. We made a vow, and we stick to it.