Couples who combine their finances may be happier and stay together longer

When a love relationship progresses to a serious stage, partners frequently face a fundamental choice on how to manage their finances: should they combine their funds or keep them separate?

In a six-wave longitudinal case, the researcher examined whether relationship quality improved over time when engaged or newlywed couples were randomly assigned to combine their finances in a joint bank account. 

Couples assigned to merge money in a joint account maintained good relationship quality throughout, in contrast to couples assigned to a no-intervention condition or to keep their money in separate accounts, which displayed the normative collapse in relationship quality over the first two years of marriage. There are numerous factors that influence how bank account structure affects relationship quality.

The Beatles famously sang, “Money can’t buy me, love.” However, according to Indiana University Kelley School of Business research, married couples who manage their finances together may love each other longer. 

This is the first study to demonstrate a causal relationship, explaining that married couples with joint bank accounts not only have better relationships but also fight less over money and feel better about managing household finances. Prior research suggests a correlation that couples who combine finances tend to be happier than those who do not. 

Jenny Olson, assistant professor of marketing at Kelley, from Indiana University, said, “They frequently told us they felt more like they were ‘in this together. When we surveyed people of varying relationship lengths, those who had merged accounts reported higher levels of communality within their marriage compared to people with separate accounts, or even those who partially merged their finances.” 

He also said, “This is the best evidence that we have to date for a question that shapes couples’ futures, and the fact that we observe these meaningful shifts over two years, I think it’s a pretty powerful testament to the benefits of merging. On average, merging should warrant a conversation with your partner, given the effects we see here.”

According to Jenny Olson, an assistant professor of marketing at Kelley, merging encourages more transparent and coordinated financial goals and a shared definition of marriage. 

Olson and her co-authors recruited 230 engaged or newly married couples. They followed them for two years as they began their married life together. Everyone started the study with their accounts and agreed to change their financial arrangements potentially. This was everyone involved in the study’s first marriage.

They discovered that couples who were told to open joint bank accounts had much superior relationship quality two years later than those who kept separate accounts. Olson went on to say that combining fosters stronger financial goal alignment and transparency, as well as a shared understanding of marriage.

She said, “A communal relationship is one where partners respond to each other’s needs because there’s a need. I want to help you because you need it. I need to keep track. There’s a ‘we’ perspective, which we theorized would be related to a joint bank account.”

According to Olson, couples with separate accounts see financial decisions as more of an exchange.

She also said, “It’s ‘I help you because you’re going to help me later, They’re prepaying for later favors, and that’s tit-for-tat, which we see a bit more with separate accounts. It’s ‘I’ve got the Netflix bill, and you pay the doctor.’… They’re not working together like those with joint accounts — who have the same pool of money — and that’s more common in business-type relationships.”

According to Olson, those in a marriage with separate accounts may believe it is easier to quit the relationship. Twenty percent of participating couples still need to complete the research, including a significant percentage of those who divorced after failing to merge bank accounts. They discovered no differences between genders in the outcomes.

According to a new study, couples with separate accounts viewed financial decision-making as more of an exchange. Those in a marriage may believe it is easier to leave the relationship. The average age of the participants was 28 years old, with three-quarters white and 12% black. 36% had a bachelor’s degree and a median household income of $50,000.

Couples had been romantically linked for an average of three years and had known each other for an average of five years. 10% of those polled had children.

Finkel conducted the study conducted by Scott I. Rick, Deborah A. Small, and Eli J.

Journal Reference:

1. Olson, J. G., Rick, S. I., Small, et al. Common Cents: Bank Account Structure and Couples’ Relationship Dynamics. Journal of Consumer Research. DOI: 10.1093/jcr/ucad020