Why fewer couples are merging finances, and how you can make separate bank accounts work


Tiara Na'puti and Chris Crowe have lived together since 2009. During the past decade they've shared six apartments, a car, and the expenses of a $72 elopement ceremony in 2013. But they've never shared a bank account.

Na'puti and Crowe are part of the growing population of couples who, despite sharing multiple financial obligations, do not pool their income. Married and cohabitating millennials are more likely to hold separate bank accounts than previous generations, according to a Bank of America study. And a new survey from MagnifyMoney of 1,000 adults finds that 57% of unmarried couples living together keep their accounts separate, as do 16% of married couples.

MagnifyMoney also finds that 1 in 5 couples with joint bank accounts say they regret combining their income with their partner or spouse.

Why couples maintain separate accounts

Sociologist Joanna Pepin of the University of Maryland, who studies couples' financial decisions, says many factors drive this trend. For one, she says, "families are complicated these days."

In 1960, 65% of children grew up in a household where the mother was the homemaker and the father was the breadwinner. As of 2012, only 22% of children grew up this way, according to a report for the Council on Contemporary Families. Additionally, 25% of parents living with a child in the U.S. are unmarried and 35% of unmarried parents are cohabitating, according to Pew Research Center.

Since families are no longer a unit that solely depends on one person's income, sharing one bank account can make less sense.

The gender wage gap sometimes plays a role, too. This generation of women still earns less than men, but they earn more than previous generations did. Nearly half of employed women, 49%, say they are the breadwinners in their family, meaning they don't have to rely on a partner's income for financial stability. And a lot of them want to retain that independence.

Families are complicated these days.
Joanna Pepin
University of Maryland

Many women have also experienced the unpleasantness that can result when money gets mingled. "Seeing family members go through financial stress because of their money being tied up with another person is an added layer of stress that I always observed," says Na'puti.

Many couples Pepin interviewed also cited student debt as a reason for keeping finances separate. "They don't want to take on the financial burden of their partner's student loans or they want to protect their partner from taking on theirs," she says.

Merging income also becomes less convenient as fewer couples marry and more couples live together. "Couples are likely keeping their finances separate when they cohabitate, so it would be counter-intuitive to change what is working," Pepin says.

Here are four tips experts say can help you handle money in your relationship if you plan to maintain separate accounts.

Communicate clearly to reduce conflict

Dr. Emily Garbinksy, a marketing professor at the University of Notre Dame who studies financial decision-making within romantic couples, found that couples experience the same degree of conflict regarding finance whether they pool their money or not. So there's no one way to guarantee a peaceful relationship, but being open and honest with your partner can help.

To lessen the odds of spending-related tension, CPA Tracie Miller-Nobles says couples should lay out a clear budget along with how much debt, savings, and retirement you each have.

Use financial management websites

"Technology has made it a lot easier to split finances," Pepin says. Crowe and Na'puti use Splitwise, which she calls a "more business-savvy Venmo." Through Splitwise you can keep a running tab of expenses, and the app will tabulate how much you owe each other. Other useful sites include Settle Up and Splittr.

Come up with a way to split joint expenses

Na'puti is a professor at the University of Colorado Boulder and makes more than Crowe, who represents a local brewery. Because they earn different amounts, Crowe says it is easier to pay for indulgences separately and equally split expenses like rent.

Na'puti and Crowe share one credit card for rent, car payments, utilities, and groceries, but they keep individual purchases separate, so they can splurge at their own discretion.

Consider a shared bank account for shared obligations

If you and your partner have multiple shared financial necessities, consider a targeted joint bank account and discuss what it pays for. Miller-Nobles' husband has kids from a previous marriage, so the couple worked that out: "In our case, Kevin pays for those from his individual account," she says.

By knowing when to share finances and when to go solo, you can maintain peace with your partner and not feel guilty about buying that third snake plant.

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