Money Matters: To Merge or Not to Merge?
When it comes to finances, couples often face a crucial decision: should they keep their money separate, combine it, or adopt a hybrid approach? A recent survey sheds light on the prevailing trends and expert opinions on this matter.
Separate but Equal?
According to a December survey, 62% of couples in committed relationships maintain at least some separate funds. Of these, 38% rely solely on joint accounts, while 34% opt for a combination of joint and separate accounts. A significant 27% keep their finances entirely separate. Interestingly, younger couples tend to favor separate accounts, with 88% of Gen Zers and 70% of millennials choosing this approach.
Why the Trend?
Experts attribute this trend to the fact that younger couples are marrying later and have grown accustomed to managing their own incomes. The ease of online banking and shopping transactions has also contributed to the rise of separate accounts. However, senior industry analyst Ted Rossman emphasizes the importance of communication in making separate accounts work. “Couples need to agree on the parameters ahead of time,” he advises.
Personal Preferences and Financial Goals
Financial advisors agree that the best approach depends on a couple’s individual preferences and financial objectives. “Unless there’s a reason to separate them, it doesn’t much matter,” says certified financial planner David Zavarelli. He recounts working with a couple who maintain an impressive 27 separate accounts, which can be challenging to manage but ultimately works for them because they’re on the same page.
Communication is Key
Experts stress that effective communication is crucial in preventing financial issues. Research suggests that a couple’s attitude toward money influences their communication style. If they view problems as solvable, they’re more likely to discuss finances openly. Conversely, a lack of communication can lead to financial infidelity, which affects 40% of adults living with their partners.
Preventing Financial Infidelity
To avoid financial infidelity, couples should prioritize regular money discussions, focusing on both short- and long-term goals. “I would urge people to set up regular money dates,” Rossman recommends. By doing so, couples can foster a culture of transparency and trust, ensuring a stronger financial foundation for their relationship.
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