The data seems mixed on the touchy subject of unmarried couples merging their bank accounts together.
On the upside, cohabitating partners who mingle their money accounts can expect more “positive interactions” and can experience “evidence of clear communication” according to a new study from the Journal of Personality and Social Psychology.
On the downside, couples who share bank accounts take a risk in doing so. A recent study on the topic concluded that 46% of “sharers” don’t know their partner’s credit score and 25% don’t know the amount of their partner’s debt. Another one in six partners took cash from the account and didn’t pay it back after a breakup.
“The decision of whether or not to combine finances with your partner is a big step,” said Heather Housley, a consumer investments director. “Sharing a bank account can affect your finances in many ways, both good and bad.”
On one hand, it can simplify your financial life by making it easier to pay shared expenses such as rent and utilities, and groceries. “It can also help you meet minimum balance requirements which could waive account maintenance fees and/or more easily save toward shared goals, like a vacation or new home,” Housley said. “However, combining finances can also mean reducing your individual privacy and future withdrawals without joint consent.”
Other household finance experts agree, adding that there’s no specific blueprint for commingling cash in a relationship – just bad outcomes if it’s all not done correctly.
“The upsides include easier bill payments, streamlined budgeting, and fostering a sense of shared responsibility,” said Laura Wasser, a divorce lawyer and chief of divorce evolution at Divorce.com. “However, the downsides can include a lack of financial independence, potential disagreements on spending habits, and complications in the event of a breakup.”
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Many couples also have a mix of combined and separate finances and that’s fine, too.
“A couple may have joint checking and savings accounts but keep separate credit cards so that each person can build their own credit,” Housley said. “There is no one size fits all – it’s all about open communication to decide what is right for your relationship.”
Taking the long view is always a good idea, too.
“Regardless of the financial decision – from buying a house to sharing a bank account, each of the life choices a couple decides to pursue will have ramifications on other choices,” said Doug Dahmer, founder of Retirement Navigator, a financial services platform for people planning for their retirement. “More of one thing usually means less of another, and compromises must be made by both parties.”
“As folks age, they’ll also need to take in mind that they will have other limiting resources as well – time, energy, attention, health, relationships, and talents,” Dahmer added.
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