Generally speaking, the vast majority of couples — even unmarried couples — share at least one joint bank account.
But that doesn’t mean it’s the right move for you.
In fact, there are some pretty powerful reasons why you shouldn’t merge finances with your partner. At least, not yet. Contrary to its core mission, merging your finances could lead to more financial stress, fights, and even jeopardize your credit score.
Heavy stuff, I know. But relationships get stronger when you face the heavy stuff sooner.
So without further ado, let’s explore five reasons you should keep your finances separate from your significant other.
1. Prevent the “Group Project” Mentality
We’ve all been in group projects where at least one person totally checks out and leaves the bulk of the responsibility to the others.
Unfortunately, that tends to happen in groups of two, as well — even if they love each other.
Once there’s a joint account where couples pool money, it’s fairly common for one half of the relationship to become the “money manager” while the other person loses focus, tunes out, and makes mistakes.
It often happens subconsciously, but the end result is the same: conflict. The money manager has the added stress of managing finances for two people now, and occasionally feels the need to deliver an uncomfortable lecture.
In some cases, the less engaged half of the relationship may even start making less money — overestimating how much their partner is willing to “take care” of their finances.
That’s not to say having one household money manager — or breadwinner — can’t work. But keeping separate accounts can help you to avoid this stress and conflict in the first place.
2. Fewer Fights and Surprises
“Hey, babe. FYI, I’m getting my hair done at Serena’s next Tuesday.”
“Serena? Doesn’t she charge like $120? I was saving up for something.”
“You mean a PlayStation 5? Can’t it wait another two weeks?”
“Why is it always me who has to wait until our next paycheck?”
When you and your significant other choose to “share” a combined pool of money, fights can sometimes break out over how to spend it and when.
These can often be exacerbated when one partner doesn’t understand — or value — what the other is trying to spend money on. Kate might be getting an especially nice haircut to impress Yulia’s parents. Yulia might want the PS5 to destress from her new job and to play online with her nephew.
But without that transparency and communication, both partners may feel like the other is spending their shared money superfluously.
A 2012 study published in the journal “Family Relations” found that financial disagreements were the No. 1 predictor of divorce. That’s not to say that sharing finances inherently raises or lowers your chances of separating. But rather, that you should carefully consider whether sharing accounts will lead to more or less fighting.
3. One’s a Saver, One’s a Spender
Being more transparent with each other is one thing. Changing lifelong spending habits is another.
Simply put, sharing finances can be a real challenge when one finds comfort in saving, and one finds joy in spending.
The more frugal half of the relationship may feel that their partner is spending irresponsibly, not practicing financial mindfulness, acting materialistic, or even holding them back from buying a house or reaching other major financial milestones. They may just wish their partner would think more about the future in general.
Meanwhile, the more spendy half of the relationship may feel that their partner is acting excessively frugal, cheap, or making fear-based money decisions. They may just wish their partner would spend a little, live a little, and enjoy some of the finer things in life before they cash in their 401(k).
Keeping finances separate will enable both partners to continue practicing their existing money habits largely unimpeded. This way, you can still teach your partner to save more — or live a little — without risking your own money and comfort in the process.
4. It Makes Separation Way, Way Less Messy
How do I make this one sound less blunt?
Sometimes, when two people love each other but…
You see, when…
Ah, forget it. Here goes:
When you break up, your partner might empty your joint bank account and disappear.
Or hold the money hostage.
“Once there’s a separation, people do weird things with money,” Wendy Althen, Certified Divorce Financial Planner, told Forbes.
“Money is one of the No. 1 reasons for divorce, and if it’s already a source of contention, that can lead to a partner emptying an account or using money as a bargaining chip,”
Granted, that money can typically be recouped during divorce proceedings — but if you and your partner are unmarried, there’s a much higher risk they’ll get away with it because technically, it’s “their” money, too.
“Under banking law your ex became a joint ‘owner’ of all your funds in the joint bank accounts(s) when you told the bank to add him to the accounts.” writes Bruce Minnick, a Banking Law Attorney in Tallahassee, FL.
It goes without saying that until you trust your partner completely, it’s best to keep your finances separate for the time being.
5. It Protects You from Your Partner’s Bad Money Habits
I have a dear friend whose husband flew to Vegas for a bachelor party and gambled away $42,000 from their joint bank account.
Mind you, the previous balance was $42,138.
Not only did her partner’s mistake wipe out 99.7% of her savings, but it also made it harder for her to pay off her car, student loans, and other bills — which in turn torpedoed her credit score.
If your partner hasn’t learned how to responsibly handle money — or suffers from an addiction that leads to overspending — it’s best to keep your accounts separate while they get the support they need and build healthier habits.
Of course, having separate finances doesn’t preclude you from helping them. You can help them pay for rehab or personal finance classes, help them to improve their credit score (here’s how), or help them establish a healthy budget — all without risking your own financial wellbeing.
When Merging Finances Still Makes Sense
Here are some cases when merging finances still makes a lot of sense:
When There’s a Large Income Discrepancy
When one of you makes way more money than the other — say, you’re an investment banker and your partner is a student — merging finances might be the move. Couples with large income discrepancies find this to be more convenient, saving countless Venmo requests for everyday grocery runs.
When Kids Are Involved
Raising a child is definitely one big shared expense. And unlike rent or a mortgage payment, it’s not easily split in half once a month.
That’s why couples with kids end up sharing at least one account for child-related expenses, another for a college fund, or just sharing everything if one partner becomes a stay-at-home parent.
For Joint Filing Benefits
Married couples who file their taxes jointly can save time and money. For example, joint filers have higher income thresholds for certain tax breaks, such as the deduction for IRA contributions.
For Transparency and a Feeling of Teamwork
Sharing your finances makes it easier to see what your partner is spending on, to hold each other accountable for your goals, and to celebrate milestones together.
“My wife and I have pooled our assets together since we were first married and we feel like a true team because of it,” says David Hunter, Director of Research and Investments at Atlanta’s CPC Advisors.
“We never have friction over who should pay for this or who should pay for that. If we have a great year, we share in the success.”
Even though most couples end up merging their finances to some degree, that doesn’t make it right for everyone. If you’re not sure yet, that’s a good sign that you should keep them separate until you’ve had a long, honest, and transparent convo about it.
Again, getting through the heavy stuff sooner is what makes relationships last.
Featured image: Elnur/Shutterstock.com