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When it comes to money, couples face one question: should we keep our money separate, combine it or some combination of both?
A December Bankrate survey finds 62% of couples who are in a committed relationship keep at least some money separate from each other.
Of those couples, 38% rely exclusively on joint accounts they share, the survey of 2,217 adults found. Meanwhile, 34% of couples have a combination of joint and separate accounts and 27% keep their money completely separate.
Younger couples tend to be more in favor of some separation for their money, Bankrate found. The survey found 88% of Gen Zers keep at least some money to themselves, versus 70% of millennials, 59% of Gen Xers and 52% of baby boomers.
Younger couples may gravitate more toward separate accounts because they are marrying later and become used to managing their own incomes, said Ted Rossman, senior industry analyst at Bankrate. Moreover, now that it’s easier to complete banking and shopping transactions online, that has also encouraged separate accounts for younger couples.
Communication is key
Keeping money separate but equal can work, so long as couples agree on the parameters ahead of time, Rossman said.
“That’s really the key for people is you need to communicate about what you’re doing with your money,” Rossman said.
Many financial advisors say the best choice comes down to a couple’s personal preferences, and what works best when it comes to fulfilling their financial goals.
“Unless there’s reason to separate them, it doesn’t much matter,” David Zavarelli, a certified financial planner and financial advisor at LPL, said of how couples manage their accounts.
However, Zavarelli said he is working with a couple who insist on separate accounts for everything, down to his and her vacation and Christmas club accounts. In total, they have 27 accounts, which can be cumbersome to maintain with the firm’s financial planning software, he said. But he’s not worried about the couple’s financial arrangement.
“They’re both on the same page,” Zavarelli said. “We do just kind of have a chuckle and then move on with the plan.”
For all couples, whether or not money becomes an issue comes down to communication, experts say.
Research from Cornell University suggests that a couple’s attitude toward money — whether or not they see problems as solvable — influences how well they communicate about finances. If they don’t feel there’s a solution, they’re less likely to talk about it.
That lack of communication can contribute to financial infidelity, when one or both partners lie about or hide financial information.
Bankrate’s survey found 40% of adults who live with their partners are committing or have committed financial infidelity. Some examples of the secrets they keep include spending more than their partner would want, having secret debt, or keeping a secret credit card, savings account or checking account.
To help prevent that, it helps to take the time to communicate with your partner about both short- and long-term financial goals, according to Rossman.
“I would urge people to set up regular money discussions or dates,” Rossman said.