In my mind, Spring marks the beginning of wedding season. Although realistically I know weddings can be any month of the year. I remember in 2020, I was talking to a wedding venue owner here in Arizona and asking how he could possibly reschedule 67 weddings that year due to COVID.

His answer: Monday, Tuesday, Wednesday, Thursday, Friday. Rather than put weddings off for a different month or even another year or more, families chose to reserve open dates on the calendar which meant non-traditionally having a wedding on a weekday/night. What a great idea to keep your business on track and keep your clients happy!

Marrying Your Finances

No matter when you got married, whether it was a large or small gathering or you eloped, the question of marrying your finances also comes with the territory of entering a committed relationship. So in an effort to help reduce the horrible statistic that now 60% of marriages end in divorce (and that percentage is higher for second and third marriages), I want to share some food for thought on what I have seen when it comes to co-mingling finances, or not.

Co-Mingling vs. Separate Finances

Money matters can significantly impact a marriage and are right up there as one of the top reasons for divorce. So I want to take a deeper look by using the newest AI fad, ChatGPT, to help us explore the pros and cons of co-mingling vs. separate finances to see what AI comes up with vs what I think couples should do, from a Certified Financial Planner perspective, when it comes to money (and a better chance to avoid money issues). I hope it helps find the right balance that suits each unique relationship.

Co-Mingling Finances

Co-mingling finances involves merging all income, expenses, and assets into joint accounts. I have helped clients consolidate accounts, even years after they’ve gotten married, once they realize the hoops they need to go through if one dies suddenly or ends up in the hospital without having everything either titled jointly, or in the name of a trust or naming a beneficiary or Power of Attorney on an account. What a mess that can be for the survivor!

This joint approach can foster a sense of shared responsibility and transparency. It simplifies bill payments, enables joint financial goals, and promotes a sense of unity. It also forces you to communicate about money, which is vital for a healthy relationship. And it allows for better financial planning as a team which can reinforce trust and commitment.

Separate Finances?

Opting for separate finances means maintaining individual bank accounts and handling expenses independently. According to AI, this approach allows each partner to maintain financial autonomy and privacy and can be beneficial for couples with different spending habits or income levels, which could avoid potential conflicts over money.

I Beg to Differ

I have seen the separate approach lead to distrust, less communication, and a tendency to think in terms of mine/yours vs us/ours. I cringe when I hear decisions tied to income, for example. If one is the main income earner now, does he/she get the most say about financial decisions?

What happens if/when that role reverses (many women out-earn their husbands now, for example), then you switch who gets to make those decisions? When you don’t both seem to be approaching decisions together, with pooled resources, that wedge can add additional challenges and control issues in the relationship in ways beyond money.

Second or Later in Life Marriages

I have seen, however, when it can be advantageous to keep finances separate in cases of second marriages or when one partner brings substantial pre-marital assets or debts. Preservation for legacy reasons to the original families involved can certainly come into play in those situations. That can often mean that assets are kept separate, but not necessarily income and expenses.

Finding a Middle Ground

For many couples, a hybrid approach may be the best solution. Each can maintain separate accounts for personal expenses while establishing joint accounts for shared expenses like rent, utilities, and savings. This approach offers financial independence while promoting collaboration on essential matters. Regular discussions about financial goals, budgeting, and long-term plans are crucial to ensure transparency and alignment with each other.

What Is Best for You?

When it comes to co-mingling vs. keeping separate finances in a marriage, there is no one-size-fits-all solution. It’s essential for couples to openly discuss their financial values, goals, and concerns to find the approach that works best for them.

Whether choosing to co-mingle, separate finances, or a combination of both, the key is to establish mutual trust, open communication, and a shared understanding of how money will be managed. Couples can lay a strong foundation for a successful and fulfilling partnership by finding financial harmony!

A Tool to Help

I have written a Before and After Marriagechecklist for all ages to help foster conversations around these money decisions like separate vs joint finances. We live and learn, so consider sharing or using this tool to improve your own financial harmony.

Let’s Have a Conversation:

What’s been your experience in separate vs joint finances? Any advice to help women with that discussion and decision?