Tim and Carolyn*, both 36, were an attractive, financially successful couple when they met through mutual friends. Carolyn was drawn to Tim’s generous and carefree style. He often bought her lavish gifts and treated a host of friends to drinks and dinner. Carolyn was more moderate in her spending.
Before the wedding, Tim pressured Carolyn into fighting with her father over her trust fund. Caroline resisted. She was also reluctant to pool her resources when she learned that, despite his six-figure income, Tim had few savings and a credit score of 550. Even before her parental trust began, Carolyn had saved a substantial nest egg and kept the credit her score around 800.
Tim argued that Carolyn didn’t trust him. Carolyn said she was just being “prudent”.
Should they pool their resources or keep them separate?
In a study titled “doommon Cents: Bank Account Structure and Couple Relationship Dynamics,” researchers Olsen, Rick, Small, and Finkel (2023) argue with a resounding “yes!” in pooling resources. They tout the many relationship benefits of pooling your financial resources.
The study conclusively supports that you’ll be happier, feel better about your household finances, and struggle less about money. Rather than seeing your relationship as “transactional,” pooling your money will make your relationship more communal, more like “we’re in this together.” That’s according to these researchers.
I say “not so fast”.
First, answer this question: “Would you participate in a study that would allow complete strangers to randomly audit the financial resources of your marriage?”
I thought not.
But 230 couples did just that in this study. They were headed one of three ways: open a joint bank account, maintain a separate one, or make their own decisions. The researchers then followed the couple over the next two years.
GIGO for the money
Considering money is among the top issues couples argue about and is often a consistent predictor of divorce, this is a simple fix, right? Collect it and reap the benefits.
According to their findings:
“This is the best evidence we have to date for a question that is shaping the future of couples, and the fact that we’re seeing these significant changes in two years, I think is pretty strong evidence for the benefits of merging.”
In computer science, garbage in, garbage out (GIGO) is the notion that faulty or nonsense input data (garbage) produces nonsense.
I argue that this is a fatal flaw of the study.
First, there is the selection bias of the subjects who would participate in such a study. You should trust your spouse to agree to such a study. After all, you will be assigned “randomly”.
Second, trustworthiness is and has been a key variable for satisfying marriages and effective money management. Let’s assume that your group of couples has already been selected by yourself as having an equally matched level of credibility. In this case, your results will be similarly flawed.
Reliability and money
The researchers suggested that given how beneficial the pooling of money was “warrant[s] a conversation with your partner” about resource pooling. Of course, discussing financial values and spending patterns is wise.
Easier said than done.
Money conversations are challenging for many couples, and those who can have them often already have them regularly.
Suggesting that all couples automatically pool their finances across the board is terrible advice.
Choose the right partner
A difference between partners (before cohabitation) of one standard deviation will increase the odds of separation by 30% in the first two years. This risk jumps to 37% in the 3rd and 4th year combined.
A standard deviation is ninety-three points in a credit score (500 vs. 593 or 600 vs. 693).
Researchers argue that credit scores are about more than money. According to the Federal Reserve’s findings, they are linked to a person’s trustworthiness and how well they generally keep their commitments. When couples differ on these critical variables, the problems go beyond paying higher interest on a mortgage or car loan.
It is not very reasonable to suggest that simply combining financial resources will promote cohesion without considering the credibility of each individual.
When a couple doesn’t match how trustworthy and reliable they are, it affects the stability of their relationship. If you handle these types of commitments in a similar way, money can cause less tension in your relationship.
Budget and pool
Planning finances together with transparency, establishing a family budget and planning for retirement all make sense. Those with higher credit can budget responsibly, set clear financial goals and calmly talk about finances regularly.
Even bad credit can be fixed over time when two people can talk honestly and build goodwill. This helps to create a long and lasting relationship.
However, if you can plan and budget and the other person refuses, these are not a match made in heaven. They are forced to adopt separate finances whether they like it or not. Chances are good that the partner who “buys today and worries about paying tomorrow” they are less likely to manage their credit wisely.
In this case, it may be wiser to decide not to share loans or credit cards and keep separate and joint accounts.
Couples like Tim and Carolyn need help aligning these variables and doing more than addressing questions like “how much should we spend?” and “What does it mean to be generous?” Dr. James Grubman argues that coming from economically diverse families can enrich a couple’s relationship rather than cause problems.
In Tim’s case, he was first-generation wealth, having started his own successful business. Carolyn was second-generation wealth and was taught to “never touch the beginning.” For Tim, “the money came around…” and he appreciated growing a large pool of friends through his greatness. For Carolyn, it was never safe to talk or discuss your family’s wealth. He found these conversations with Tim extremely challenging. Tim took calculated risks, which made him successful in his business, but while he knew that “cash is king” in his business, he paid less attention to his personal finances. If he and Carolyn were going to have a long and happy marriage, they would have to do it consciously.
Simply collecting their money, without a long and thoughtful discussion, such as in an intensive Couples Therapy Retreat, would be a poor solution.
Do joint bank accounts mean lasting relationships?
The consensus of previous studies is that money-related issues consistently emerge as major points of contention in many marriages. To suggest such an easy solution is ridiculous.
Individual factors such as impulse control, ability to plan for the long term, emotional regulation and a similar credit score all play a role.
All things being equal, couples with equivalent money management (or mismanagement) skills will be happier than those who are not.
Sharing finances responsibly with your spouse will undoubtedly lead to a more cooperative attitude. However, contrary to this researcher’s assumption, it is not due to a “we” perspective. It’s because they are financially sound.
In fact, your financial health is shaped by clues that reveal a larger narrative about your connection to money. This includes how effectively you can manage your financial responsibilities, how confident you are about your financial prospects, and ultimately whether you have the freedom to make financial decisions that allow you to enjoy your life. And what constitutes a “good life” varies from person to person.
Those who read the headlines and jump on the research bandwagon would be wise to look deeper. Handling money in a marriage is complicated and needs to be handled carefully.
RESEARCH
Jenny G Olson, Scott I Rick, Deborah A Small, Eli J Finkel, Common Cents: Bank Account Structure and Couples’ Relationship Dynamics, Journal of Consumer Research, 2023;, ucad020,
