When people decide to get married or form committed partnerships, they often have a lot of decisions to make, including how to handle their finances. While traditionally newlywed couples have pooled their money together in joint accounts, these days more couples—especially millennials—are choosing to keep separate accounts, retaining control over their own money.
Keeping financial arrangements separate seems like a good idea for many reasons. For one thing, couples often fight about finances, and keeping them separate might reduce those kinds of conflicts. There may be power imbalances in the relationship that would be less problematic if both members of a couple kept their own accounts, too. Having separate accounts could make splitting up, if necessary, less complicated than it needs to be.
But according to new research, there is a potential downside to doing this: People who keep their financial resources separate are less happy with their relationship than couples who don’t—and their relationship is less apt to survive.
Sharing money leads to conversations
In a 2022 study, researchers surveyed over 1,000 married adults about their relationship satisfaction and how they managed their financial resources—whether their money was pooled, partially pooled (where some accounts were kept separate), or kept completely separate.
They also looked at data from the British Cohort Study—a longitudinal study of children born in Britain during a single week in 1970. Among those participants, the researchers could see how pooling resources affected relationship happiness at one point in time (2000) and whether it predicted a divorce in the intervening years.
In both sets of participants, those who pooled their resources were significantly happier in their relationship than those who didn’t pool resources at all or only pooled them partially, with those who didn’t combine them at all being the least happy of the bunch. In the British Cohort Study, pooling resources also reduced the probability that a couple would split up.
“There’s a lot of talk about financial independence and spending money the way you want to spend it,” says lead researcher Emily Garbinsky of Cornell University. “But when we look at these thousands of people, on average, we do see that pooling resources matters for relationship satisfaction—especially for lower-income individuals.”
Why would that be? Garbinsky thinks that when you pool your finances, it enables you to have more transparency in your relationship in terms of how much money you have and how it’s being spent. So, she says, while sharing resources can lead to conflict, it might also drive conversations.
“Feeling like we’re on the same team—like we’re setting financial goals together and talking about things—these are all facilitated by the fact that we’re pooling our finances together,” she says. “The power of financial conversations is something that’s really important and probably a key driver of why we’re seeing these longitudinal effects.”
Shared goals means more happiness
Of course, it’s always possible that people who had concerns about their partner from the start of their marriage might also choose to keep money separate. Initial dissatisfaction in a relationship could then lead to a later breakup, and pooling money may not be the real underlying factor.
To get at that, Garbinsky and her colleagues did an experiment. They recruited people in committed relationships who were on their way to a college football game and offered them a plastic bag full of nickels (supposedly to buy a commemorative mug). Some participants were randomly assigned to put their name on the bag, while some were told to put their and their partner’s name on the bag (whether or not the partner was present with them). Then, they answered questions about their relationship satisfaction.
Despite this relatively minor messaging, those who marked their bag with both names rated their relationship higher than those with only a single name on it. This was true whether or not the participant’s partner was with them at the time.
“We were actually quite surprised that we were able to find this effect using a relatively simple task,” says Garbinsky. “Just thinking of this windfall of cash as ‘our money’ and not just ‘my money’ triggered these higher-order beliefs about their relationship.”
Why would that be? Garbinsky hypothesizes that pooling money may be related to having a sense of shared goals. When they surveyed a new group of married participants online, and asked them to what degree they shared financial goals with their partners—and about their relationship satisfaction and how they managed their finances—they found that the degree of shared goals seemed to account for why pooling resources led to more happiness.
Which comes first, sharing or happiness?
Still, it’s hard to know for sure what causes what without doing a randomized, controlled trial. Fortunately, Jenny Olson of Indiana University and her colleagues did exactly that.
In her just published study, Olson recruited engaged couples and newlyweds (only heterosexual) and asked them to participate in an experiment involving their finances. All of the couples started the experiment with their finances kept separate; then researchers randomly assigned some couples to change course by pooling all of their finances together (giving them a month to do so), while others were told to either keep their finances separate or to manage their finances however they wanted.
Then, participants were surveyed six times over two years to see how happy they were with their relationship and how much they felt in harmony around their finances (for example, whether or not they were satisfied with the amount of money they or their partner were saving versus spending, and how much conflict there was between them around finances).
Again, those couples who had pooled their financial accounts were significantly happier than those who’d kept them separate or done whatever they wanted. Those sharing finances found that their marital satisfaction was maintained rather than declining over the course of the first two years (a typical pattern for newlyweds).
This is a major, landmark finding, says Olson.
“We can now disentangle whether merging your accounts makes you happy or that happy people merge their accounts,” she says. “Our research really offers the first experimental evidence that merging accounts is good for marriage.”
Olson also points to the fact that this benefit isn’t just about a moment in time—in other words, you’re only happy when you first pool your money—but a trend that continues over the first two years of marriage. Like Garbinsky, she believes it could be due to more financial harmony, which also increased for those who pooled their money.
“For people in the joint account condition, we see substantial increases in financial harmony over time, which can explain their trajectory. So, they’re doing better in large part because they feel better about their finances,” she says.
To see how pooling finances affects couples in the even longer term, Olson also surveyed a larger group of married couples (married for 15 years, on average) about their financial situation and how that affected certain relationship dynamics. Though not an experiment, the study did find that couples pooling finances also experienced greater financial harmony and stronger alignment around their financial goals, as well as a stronger sense of “communal norms”—meaning, a wiliness to do things for each other without expecting reciprocity.
“We see a stair-step pattern across a lot of different variables, so that couples are the most communal when they have joint accounts compared to partial merging or separate accounts—presumably because it signals that they’re on the same team,” she says.
Not so fast!
Overall, these findings suggest that couples, young and old, may benefit from pooling their finances. Still, neither Olson nor Garbinsky suggests everyone should run out and quickly change their bank accounts.
It’s possible that other factors must be considered first in these decisions—and that pooling accounts would not lead to greater happiness for all couples. For example, some members of a couple may have experienced financial hardship after a previous failed relationship and so feel a need to protect themselves financially by keeping accounts separate. Or there could be other complicating issues, like one partner owning their own business and needing to keep money separate for accounting purposes. It’s also important to not prematurely combine finances; couples should wait until both parties really trust the other and are confident in their shared goals.
While pooling resources may not be a cure-all or advisable for everyone, they say, people may at least want to consider it as an option before assuming separate finances are always a better choice. After all, pooling one’s resources seems to make a marriage happier and more stable—something most couples want when they first say “I do.”
“Couples do seem to be happier when they have a joint account, at least for those first two years of marriage—and possibly later, too,” says Olson. “I think, given our evidence, [pooling one’s resources] at least warrants a discussion.”
Plus, says Garbinsky, discussing the possibility of pooling one’s resources may nudge couples toward communicating more openly and honestly about money, in general—something bound to help their relationship flourish.
“The lesson should be that it’s really important for you to feel like you’re on the same team and set financial goals with your partner,” she says. “Combining your finances seems to be one way to force you to do that.”