When Nia Darville Stokes-Hicks and Armondi Stokes-Hicks married two years ago, they set up five bank accounts.
Each had an individual bank account for personal expenses and they shared a payment account for paying household accounts. They had a joint savings account. And they had another account for money that the couple had set aside to use together. They were not unusual – 34 percent of the couples have a mix of accounts and 23 percent keep their finances completely separated, according to a Yougov survey that was carried out three years ago for Creditcards.com.
With American couples who get married later in life, according to the Census Bureau, maintaining individual reports has become more often than it once was. By the time that most people reach their late 20 and early 1930s, they have been working for six or more years, they have set up their own payment and savings accounts, have established credit and even have a house or a brokerage account. People often want to retain their own financial independence after marriage, but experts say that this is not necessarily a good idea, especially if you think of long -term goals such as saving for retirement.
“Beyond are the days that couples get married from school and open their first bank account together and learned together how to manage money,” said Bill Nelson, founder of PaceSetter Planning in Arlington, VA.
Having individual accounts made it more difficult to see the total financial image of the household, said Mr Stokes-Hicks, 28, a former production assistant of Netflix writers who works as a Starbucks-Supervisor and lives in Jefferson County, Colo . He and his wife agreed to simplify their finances last year when they realized that they did not use their individual bank accounts – they issued their credit cards and paid them with the help of the household account account.
Now they share three accounts: a high-yield savings account, a payment account for household accounts and another savings account. Both are registered for pension plans sponsored by the employer.
“I feel that it is a lot easier to achieve your financial goals if you all work in the same direction and both have all the information,” said Mrs. Darville Stokes-Hicks, 27, who works as a diversity, fairness and inclusion director .
Although almost one in three people in a 2024 survey believed by Wallethub that sharing a financial account has led to an increased conflict, research is that the opposite is true.
A recent study published in the Journal of Consumer Research showed that couples with joint accounts were usually happier and more dedicated than those without. The merging of finance helps to coordinate the financial goals of a few and encourages them to create a stricter bond while working together on saving for a house or pension, according to the research.
“Joint accounts are almost forcing you to have those conversations and step into the same team,” said Jenny G. Olson, one of the authors of the study and a Assistant Professor of Marketing at the Kelley School of Business of Indiana University. However, she acknowledges that there are cases where a joint account can be problematic – for example in relationships where there is domestic violence.
Most couples have to consider setting up a joint account because it enables them to make informed decisions and helps to create a 'we' perspective, said Dr. Olson. Separate accounts can lead to a “u versus me” perspective and possibly to incorrectly aligned financial goals.
Couples who keep their finances separate can still work on shared financial goals, provided they exchange financial information.
“I think, regardless of what financial agreement you make, as long as you are transparent about it and the other person has the feeling that they are being included in the knowledge, you will have the start of a successful relationship,” said Kathryn Smerling, a family therapist In New York City.
Manage money together and separately
Carlyle and Shawn Button lived together for a few years before they got married five years ago. After they married, they did not combine their accounts, but each added the other as an authorized user for emergency purposes.
“I think it happened from a place where we had individual finances as adults before we lived together,” said Mr Button, 32, a chef and kitchen manager at a brewery in Henderson County, NC, where the couple lives.
Mrs Button, 30, pays utilities, internet and telephone accounts, while Mr. Button takes care of their car award and car insurance and regularly deposits money into a savings account for large joint purchases, such as the new car they recently purchased. They take turns in turn for groceries. They each pay for their favorite streaming and subscription services, such as YouTube and Xbox. The only account that they split evenly is their rent.
“I take the heavier weight of accounts because Shawn manages our savings account,” said Mrs. Button, who works as a bartender at another brewery in Henderson County. “I am not necessarily great in thinking about savings as an account itself, and that is him.”
Although the buttons keep their accounts separate, they jointly submit tax and share how much they earn. They also discuss financial goals, such as saving for the car. Mr Button contributes to a pension account and Mrs. Button is registered in a pension plan sponsored by the employer.
However, the couple does not discuss their purchases for themselves. If the bills are paid and money is saved, each person is authorized to buy what the person wants with his or her own salary, Mrs. Button said.
After someone has been financially independent, it may be difficult to suddenly have to ask a spouse to spend permission to spend money. If a few financial independence wants to retain, Brandon Welch, a financial adviser at Newport Wealth Advisors in San Diego, recommends this approach: set up a joint account for household costs and then basic contributions on the total income of each person. The couple must also match joint goals, such as saving for retirement, a house or a university fund for children. Whatever money remains, you can go on the individual account of each person to spend how the person chooses, he said.
Errors and solutions
Regardless of whether a few bills combines or keeps it completely separate, the key is that every spouse is completely transparent.
“If a few you should have a way to see the entire financial snapshot of your family at a certain moment,” said Mr. Nelson of PaceSetter Planning. For example, couples can follow spreadsheets to follow and out income or use budgeting software. Couples with individual finances that do not discuss income and savings risk that undermine their financial goals in the long term.
For example, when a partner pays considerably more household costs with regard to the person's income, this can hinder the capacity of the couple to save for retirement, said Michael Carbone, a financial adviser at Eppolito Financial Strategies in Chelmsford, Mass.
In households where couples have an unfortunate income, it is not uncommon for the higher earner to contribute the maximum amount to pension savings, while the lower earner is struggling – usually because he or she assigns too much income to accounts, Mr Carbone said, said Mr Carbone, Mr Carbone said, Mr Carbone said, Mr Carbone said Mr Carbone.
By viewing household finances holistically, mate can fairly split the payments and maximize the pension savings of both spouses, especially if the higher earner covers more of their shared costs. Not only would the couple save more for retirement, but they would reduce their taxable income.
“I think many people underestimate the power of deferred accounts of tax,” said Mr. Carbone.
Another potential error that pairs make when they maintain individual bills is to duplicate emergency funds, to record cash that would be better invested or saved.
“If each person does it separately, they can in principle have double what they need, in cash reserved,” said Justin Pritchard, founder of Approse Financial in Montrose, Colo. That money can be used better to pay off debts, thereby paying off debts, a maximum contribution to a 401 (K) plan or opening tax expenditure for healthcare, he said.
Keeping track of individual finances can mask potential economic vulnerabilities and give couples a false feeling of their general financial situation.
“If one partner is struggling and the other partner does well, then the one who does well, may think that everything is peachy sharp, but the other person hardly makes it or even takes on debts,” said Mr. Pritchard. It can also give the partner who makes less income the wrong impression that the couple have a hard time.
As a bartender, Mrs Button relies on tips and often earns less income in the winter, Mr Button said. When her salary drops, he pays a larger part of the bills.
“You have to trust your partner,” said Mrs. Button, “to know that they are going to bear a level of responsibility like you.”
