When you are in a committed relationship, at least some aspects of your financial life are inevitably integrated. However, that doesn’t mean you need to consolidate all your accounts. In fact, most Americans don’t.
New survey data from Bankrate shows that most couples (62%) in committed relationships keep at least some financial accounts in their names only. For the purposes of the study, we define ‘couples in a committed relationship’ as couples who are married, in a civil partnership, or cohabiting with their significant other.
Raina McClain, a financial literacy advocate at financial coaching firm Rebellious Resources, says financial separation is important in a healthy relationship. Usually less risky than fully combining all accounts.
“Integrating finances is more than just consolidating assets,” says McClain. “You’re taking on your responsibilities as well.”
Here’s a breakdown of how American couples approach the money mix, when you first start talking about money in your relationship, and how you and your significant other can approach this topic.
Less than 40% of couples fully combine their finances
Fewer than two in five American couples (38%) are fully financially united. In fact, around one in four (26%) keep their financial accounts completely separate, with the remaining 36% having a mix of joint and separate accounts.
Trinity Smith, 27, and Zachary Sherman, 26, live in Bossier City, Louisiana. They have been a couple for about 3 years and moved in together just a year ago. Since then, they’ve been conducting so-called “weekly household budget meetings” to review household finances and update spreadsheets that track spending. This is especially helpful since Smith works full-time and does not contribute financially at the same level as Sherman, who is juggling full-time college studies and a part-time job.
The couple is candid with each other about money, even though they keep all their accounts separate.
McClain said such an approach is much safer than a complete combination of finances. When you fully integrate your finances with another person’s finances, that person’s debt becomes yours. If something goes wrong in your relationships or finances, it can be even more difficult to get out of the situation.
“Regardless of the gender makeup of your relationship, it’s very important to maintain your financial identity at the beginning, middle, and possibly end of the relationship,” she explains.
Most Americans say couples should start talking about money after a few months of dating.
When it comes to when couples start talking about various money issues with their romantic partners, the most common answer across all six categories was a few months after they started dating.
Intense conversations about money early on “can be a little too much for some people,” says McClain. At the same time, this is an important topic that should not be postponed for too long. Even if it’s just asking someone how they split the check, there are ways to start bringing up the topic naturally on your first few dates.
“I don’t think it’s ever too early to start the discussion,” McClain said. “And frankly, the sooner you start, even at such a small stage, the easier it will be to build and talk about the really difficult things.”
Smith and Sherman were forced to discuss money relatively early on, as they experienced a financial emergency a few months into their relationship.
“Insurance wouldn’t cover the cost, so we had to have financial discussions,” Sherman explains.
Over time, it became less difficult for couples to talk about money, especially as they learned that each other’s habits were very different. Smith likes to save money, and Sherman admits he’s an “impulse buyer.”
“Through trial and error, I think we’ve arrived at a pretty good middle ground,” Smith said.
Keeping a completely separate account decreases with age
Like Sherman and Smith, most Gen Z couples (ages 18-29) maintain their own accounts. In fact, more than half of Gen Z (51%) maintain a completely independent household finances, compared to 34% of Millennials (ages 30-45), 23% of Gen X (ages 46-61), and just 15% of Baby Boomers (ages 62-80).
The situation for baby boomers is almost the opposite, with nearly half (45%) fully integrating their finances, compared to 22% of Gen Z, 32% of Millennials, and 40% of Gen X.
When discussing money in general, the data paints a similar picture. According to Bankrate’s Financial Taboo Survey, young people are overall more comfortable talking about financial topics with loved ones and close friends.
“From what I’ve seen,[Gen Z]really values fair and balanced relationships,” McClain said.
McClain theorizes that this may be because young people have grown up with more legal and economic rights than any previous generation. Marriage was once considered an economic necessity for women, and until the 1970s, women could be denied credit or fired from their jobs during pregnancy. But because these protections were already in place when Gen Zers were born, they are more likely to view romantic relationships as an option to maintain financial independence, rather than as a necessary safety net.
How to handle household finances as a couple
Talking about money can be an uncomfortable topic, but it’s not one you want to avoid in a relationship. Here’s how to find the right approach to combining your money as a couple.
- discuss your values
If you think of these discussions strictly as money conversations, McClain says it can be difficult to talk about money. “If you talk about what you value and what you want for the future and how you’re going to accommodate that financially, it’s probably going to be a little bit easier.”
Once you both know what you want, you can talk about what tools you need to achieve it. Perhaps a savings account with a pool of emergency funds makes sense. Or maybe you need to become an authorized user of a rewards credit card to earn the miles you need for your next vacation.
- talk about protecting your money
As a couple, you want to protect your financial security and each other’s safety. McClain recommends discussing access to accounts used to pay rent or mortgage, utilities, and other necessities. If something happens to one person, the other person should still be able to use the account for all important payments.
“I think this is one benefit of having at least partially integrated accounts,” she says.
- discuss your contribution
Whether you have combined accounts or not, you must decide how each person will contribute to your shared financial responsibilities and goals. McClain says 50/50 may work for some people, but if one person earns significantly less, it may not be a fair distribution.
When it comes to Smith and Sherman’s budgets, Smith contributes more and handles most of the money management. However, the couple gets along well.
“Open communication is key,” Smith laughs. “People weren’t kidding about it.”
“And learning each other’s thought processes and being a little more graceful on the speed bumps… that’s very important,” Sherman added.