More bank accounts, more problems
Madeline Fry Schultz
Couples may choose to keep their bank accounts separate to avoid marital conflict, but those who pool their finances together are actually happier and, usually, richer.
Less than half (or 43%) of couples pool their finances together without keeping any separate bank accounts, according to one survey. About one-third of couples have some combination of joint and separate accounts, leaving more than one-fifth who choose not to share their finances at all.
And why should they? Well, the research on pooling financial resources is clear: Joint bank accounts lead to greater relationship satisfaction and accountability, according to researchers. “Maybe in some ways, the more that we can increase that transparency and awareness of each other’s behavior, that might keep everyone more coordinated and on track,” said Joe Gladstone, an assistant professor of marketing at the University of Colorado at Boulder who researched pooling finances and relationship satisfaction.
Not only are couples with this level of financial transparency more likely to stay together, but they’re better equipped to make big financial decisions, not to mention pay bills and earn more interest on their pooled savings. Married couples are also four times wealthier than cohabitating, unmarried couples. One reason: joint bank accounts.
But if joint bank accounts are good for married couples, why aren’t more using them? Specifically, why are they so unpopular with young people? Millennials and members of Generation Z are most likely to keep their accounts separate — among millennials, 69% keep at least some individual accounts, and 64% of Gen Z couples do the same.
The younger generations are also the highest offenders when it comes to keeping financial secrets, with 61% and 48% of Gen Zers and millennials, respectively, engaging in what a CreditCards.com survey called “financial infidelity.”
There could be many reasons why those 40 and younger are more reluctant to pool their finances and be transparent about their spending. Many of them have grown up with a high divorce rate, watching their parents split up and struggle to divide their finances. They’re also getting married later and producing two-income households, which, according to Ted Rossman, a senior industry analyst for CreditCards.com, “adds up to a population that wants more autonomy over its own money.”
Young people may value autonomy above everything else, but it might cost them. To paraphrase The Notorious B.I.G. song “Mo Money Mo Problems,” it’s like the more bank accounts we come across, the more problems we see.