Sharing Finances in a Marriage

When two people are united in marriage, they simplify their lives by combining financial assets such as checking and saving accounts, a move which, according to one marriage therapist, Beth Erickson,  brings “greater intimacy.” 

Erickson’s view is shared by the majority of Americans as showed by a recent survey conducted by  Merrill Lynch in February.  According to Merrill Lynch’s Affluent Insights Survey, “89 percent of married couples manage their money collaboratively.”  The survey revealed, however, that 57 percent of these married couples argue over money.

Not all financial experts believe pooling finances in a marriage is a wise move.  Financial adviser Nick Scheumann said, “It would be better if more people split it out.  When it comes to commingled assets, a lot of married people can’t handle it.”  The survey conducted by Merrill Lynch reports that money disputes are the significant contributor to one in three divorces.

Listed below are five benefits of keeping finances separate in a marriage.

  • Separate Accounts Add Flexibility and Safety of Diversified Investments – A married couple can insure more when each person sets up a separate account.
  • Credit Scores Stay Single – Credit scores are tied to single individuals, not couples.  Opening a bank account in your own name is the first step in establishing your credit score.
  • Shared Money Means Shared Responsibility – When a couple pools their money, neither person takes full responsibility for the account, and that makes it easier to spend and harder to save.
  • Marriage Is Not Always a Tax Benefit – An accountant can figure out if you would reap more savings by filing single or as a married couple.
  • Self-Employed and Small-Business Expenses – Again, an accountant would be needed to assess whether it would be beneficial to have separate or joint accounts come tax time.

One compromise for couples deciding whether to pool finances or not would be to keep some accounts separate while establishing a joint account both spouses contribute to for covering household expenses.

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