Some couples share everything, from homes, to clothes to pets. But there’s one thing many don’t mingle: finances.
In fact, one in five people keep and manage their money separately from their partners, according to the first annual Policygenius Couples and Money survey. An even greater percentage (24%) don’t share any major financial accounts, including a checking, savings, credit card or mortgage account, while almost 30% of couples don’t even know each other’s salaries.
“It doesn’t surprise me that many people keep their money their own, especially if their partner is in debt,” Michael Kelley, certified financial planner and founder of Kelley Financial Planning, said. “Without transparency in the finance department of your relationship, you could run into some problems.” (Before you get married, make these money moves.)
Our survey speaks to this common assertion. Among couples who don’t manage money together, 20% say they plan to leave their partner due to financial problems. Compare that to couples who do handle their finances together: Only 4% told us they plan to leave due to their partner’s money issues.
The survey was based on responses from a nationally representative group of 1,526 adults across the U.S. It was conducted on Google Surveys between Aug. 28 and Aug. 31, 2018. Its other key findings are highlighted below.
Why couples keep money apart
More than half of couples who manage their money apart from their partner don’t share any financial accounts, including checking accounts, savings accounts, mortgages and credit card accounts. Many people who manage money separately don’t have any knowledge of their partner’s finances, our survey shows.
Keeping separate financial beds is partially the product of cultural changes. Young people are getting married later, and waiting until they’ve tied the knot to manage their money together, said Catalina Franco-Cicero, a certified financial planner at Tobias Financial Advisors.
Our survey supports this trend: 54.3% of couples who live together without kids manage money separately, while only 17.4% of couples who are married without kids do.
People “sometimes move in together without considering how finances are going to work,” Franco-Cicero says. “It’s not always equitable.”
Other societal shifts include an increase in dual-income households. A 2015 survey from Pew Research Center found the share of households in which both parents work full-time has climbed to 46%, up from 31% in 1970. The growth was largely attributed to more women entering the workforce, but is also related to the increase cost of living. Families with two full-time working parents were better off than other families, Pew found.
The survey results could be affected by some people’s proclivity to hide an account or money from their partner, said Dennis Nolte, certified financial planner and vice president of Seacoast Investment Services. People keep secret accounts if they find their partner’s spending habits unsavory and don’t want to give them access to their own money, or their partner is in a lot of debt.
“Lots of people keep things walled off from everyone, even their partner, and finances are no different,” he says. “If you’ve been burned before, you may be even more likely to hide something from your partner.”
The pros & cons of keeping your money apart
Keeping your money separate isn’t always a bad thing — especially, as Nolte mentions, if you just went through a nasty divorce or you have an inheritance you want to protect.
Having some or all of your own financial accounts can foster a sense of security, since you won’t be left in dire straits if your partner leaves you or unexpectedly passes away without life insurance or an estate plan. The former isn’t an unfounded concern: 54% of survey respondents said they didn’t have a life insurance policy in their name. (Policygenius can help couples compare and buy life insurance together to reverse this trend.)
Plus, in some relationships, keeping separate accounts for discretionary spending can reduce fighting.
“You may just want your own stash of money to keep peace in the marriage,” Franco-Cicero says. “Do what you’re comfortable with — you can have funds separate and be fine.”
Conversely, couples who manage their money separately may be less prepared if financial emergency strikes, since they don’t know how much cash each has on hand or banked away for retirement, said Ashley Folkes, a certified financial planner and Divisional Vice President at AXA Advisors.
That’s why, no matter how you handle your money, communication should come first.
“The perfect formula is, regardless if you keep your money together or not, you need to talk about money,” he says. “When people stop talking about money … there are painful implications. It’s going to destroy your relationship.”
Other financial experts echoed this sentiment.
Paul Morrone, a certified financial planner at U.S. Wealth Management, has worked with clients who hid debt from their significant other, only to later file for bankruptcy and drag their partner down with them.
“Obviously, that’s going to cause relationship strain on the partner who got screwed over,” he says. “I don’t blame them.”
How couples can do money better together
You don’t necessarily need to go to the bank tomorrow and merge all of your finances. But it helps to talk openly about the status of your financials — good or bad — and set goals for the future.
Morrone doesn’t recommend managing every penny together, but suggests couples keep at least some sort of household budget for shared expenses. As long as financial expectations and goals are roughly aligned, the couple can spend their money how they see fit, he says.
“You need to be somewhat working together,” Morrone said.
Couples who share expenses should have an open discussion about how to split the cost, says Kristi Sullivan, owner of Sullivan Financial Planning in Colorado. For example, if one person makes more money and wants to buy a nicer house than their partner can afford, they need to talk about splitting the cost fairly — not necessarily equally.
“If you’re going to some sort of split for household bills, make it proportionate to what each person makes,” Sullivan said.
Longer-term goals are harder to divvy up. If one partner is a saver and the other is a spender, they might be in very different situations when it comes to retirement.
“That can lead to resentment and a diminished lifestyle in retirement, so long-term goals needs to be agreed upon just like the other bills,” Sullivan said.
It’s also important to talk about money regularly.
Every other Sunday, Kelley sits down with his wife so they can assess their financial health. They goes through their spending and 401(k) contributions and plan financially for any upcoming events. He says this helps him understand “where everything’s at” financially, so there are no surprises.
“It adds a whole new level of transparency,” Kelley says. “It takes a lot of unnecessary stress out of the relationship. It helps you sleep better at night.”
Myles Ma contributed reporting.
