The Benefit of Merging Finances in a Marriage
Money is a common source of stress and conflict in any relationship, especially in a marriage.
Often couples can argue about money, as it touches on many emotional and practical aspects of our lives. So, how can couples alleviate this stress and improve their relationship? According to recent research, one effective solution is to merge finances.
A study by the Kelley School of Business at Indiana University found a causal relationship between married couples who merge their finances and better relationships. The research revealed that couples with joint bank accounts reported higher levels of commonality within their marriage than those with separate accounts or partially merged finances.
Assistant Professor of Marketing at Kelley, Jenny Olson, explained, "They frequently told us they felt more like they were 'in this together.' This is the best evidence that we have to date for a question that shapes couples' futures." The study also found that couples who merged their finances fought less over money and felt better about handling household finances.
Prior research had suggested a correlation between couples who merge their finances and happiness in their relationship, but this study is the first to show a causal relationship. The study followed couples for two years and found that the positive effects of merging finances were consistent over time.
Of course, merging finances can be challenging. It requires trust, transparency, and communication. Couples must discuss their financial goals, habits, and values before joining their finances. But once they do, a sense of unity and collaboration in the relationship begins to build.
Over the long term, the increase in financial planning efficiency can be substantial.
And while merging finances can be an excellent way for couples to feel like they are working together towards their financial goals, it's important to acknowledge that it may only work for some couples.
Sometimes, it may be more beneficial for couples to separate their finances, such as when one partner has significant debt or poor credit. However, even in cases where couples choose to keep their finances separate, it's still essential for them to have open communication and transparency about their finances. This can include discussing shared expenses and creating a budget to ensure that both partners are on the same page regarding their financial needs and goals.
While we work with a few couples who do not merge finances and it works well for them, the long-term benefits of combining finances should always be considered, especially in a new marriage. It can not only improve the relationship, but it can also reduce stress and conflict around money. Couples considering merging their finances should take the time to have open and honest conversations with their partner and consider the positive impact it could have on their relationship.
Shean