Deciding to combine your finances with your significant other can be a big step in the relationship.
Nearly 2 in 5 couples, or 39%, of couples who live together completely combine their finances, whether they’re married or not, according to a new report by Bankrate.
How couples handle money together varies across generations.
Gen Z adults, or those between the ages 18 to 27, are the most likely to keep their finances completely separate from their significant other, with 38%. By contrast, baby boomers, or adults age 60 to 78, are the most likely generation to fully combine their finances with their spouse or partner, at 44%.
Bankrate polled 2,233 U.S. adults in December, including 1,124 who were married or living with a partner at the time of the survey.
“One thing that comes up is the anxiety of, ‘Will I lose my autonomy if I merge my finances?'” said financial therapist Lindsay Bryan-Podvin, a behavior finance expert with Bread Financial.
Almost half, or 46%, of people who are in relationships keep their finances separate to avoid losing their financial independence, according to a recent survey from the financial services company. It polled 1,659 U.S. adults in early January.
“We don’t want our partner to turn into a pseudo-parent,” said Bryan-Podvin. “When we lose that financial independence, we all of a sudden get this dynamic of checks and balances versus equality.”
Why Gen Z tends to keep finances separate
Of couples in live-in relationships, 36% those earning less than $50,000 a year in household income keep their finances separate, Bankrate found.
“Lower-income households are often younger adults,” said Ted Rossman, a senior industry analyst at Bankrate. “The intersection between young adults also being those who have lower incomes may be helping to explain some of the divides.”
“In a lower-income household, it may be more likely that finances stay separate for a host of reasons,” said Bryan-Podvin. There’s a higher likelihood that they might have some anxieties around financial institutions and might do things outside of traditional banking systems, she said.
There can also be a level of shame about the amount of student loan debt or credit card debt that young adults carry, said Bryan-Podvin. Separate finances may let them keep those financial challenges private.
Gen Zers also grew up with a phone in their hand or with ready access to apps and technology, something that prior generations lacked, Bryan-Podvin said.
Therefore, they may not see the need for joint finances, especially when they could easily chip in for a joint expense through apps like Venmo or Zelle.
“It’s far easier to send and request money via a host of different apps,” Bryan-Podvin said. “It’s a part of just the enmeshment with technology that they have and how that piece is a bit more normalized.”
Yet, not all Gen Z couples are keeping their finances apart: Roughly 34% of Gen Z couples who live together fully combine their finances while 28% have a mix joint of “yours, mine, and ours,” Bankrate found.
While financial independence can be a priority for some couples, there are a few bonuses to joining forces.
How ‘yours, mine and ours’ can alleviate concerns
About 38% of co-living couples have a mix of joint and separate accounts, while 24% keep finances completely separate, Bankrate found.
Experts suggest couples should consider weighing a “yours, mine and ours” financial picture because it can help couples have best of both worlds: Individual accounts offer some financial independence within the relationship, alongside joint accounts for shared obligations.
“Yours, mine and ours can alleviate a lot of these concerns,” Rossman said. “This can be a healthy way to manage money as long as you agree upon a framework.”
Money can be a leading source of argument among couples, or even “financial infidelity,” or the practice of keeping certain purchases or financial realities a secret.
Almost half, or 48%, of couples admitted to have secretly made a financial decision without consulting their partner, Bread Financial found.
About 16% of coupled respondents hid a purchase from their partner while 22% admitted to withholding their credit card balances. Further, 12% of male respondents said they hid cryptocurrency ownership from a partner, compared to only 4% of women, according to Bread Financial.
However, couples who appreciate the idea of financial independence need to have open and honest discussions about money, said Bryan-Podvin.
If you and your partner decide to merge finances for shared responsibilities, discuss how much each person should contribute to the shared account. Such talks also help you come to terms about allowing each other some financial autonomy, she said.