How to combine finances with your partner

We know money can be a tricky subject in relationships, and a question that comes up a lot is what to consider when combining finances with your partner (if you choose to do so).

Money is the number one issue partners fight about, but also a topic many avoid talking about. And a 2021 survey found that money disagreements are the second leading cause of divorce in America. 

In that survey:

• 94% of partners who said they have a “great” marriage discuss their money dreams with their spouse (compared to only 45 percent of respondents who say their marriage is “okay” or “in crisis”).

• 87% who said their marriage is “great” also say they and their spouse work together to set long-term goals for their money.

Our parents’ generation traditionally had one joint account and used it to pay bills, save, spend, and manage the household. But there’s a new normal.

After interviewing hundreds of partners, here are the different ways modern households are currently thinking about and/or managing their money:

Option 1: Yours, mine, and ours

The default for city partners

It’s 2023, and things are different from our parents’ generation. We’re largely dual-income households now. We’re getting married in our late twenties and thirties, we’ve worked longer in our careers, and have multiple bank / investment / retirement accounts. And when we think about joining financial forces with our partner, things can get confusing, stressful, and messy – fast. Most partners who choose this structure earn $80k+ in combined income but have less than <$1M in net worth each. This tends to be the default for partners living in cities.

A hybrid approach to finances can help find a compromise that works for both of you. Think of it as the ‘just right' solution for the Goldilocks partners.  

75% of millennials felt having only joint accounts just aren’t suitable for modern relationships where both partners work.

The Pros

• Teamwork makes the dream work, and you both have an equal say.

• You get to maintain a level of independence that you might be used to.

• It’s easier to decide how to split your savings amounts towards shared goals and avoid resentment issues if things don’t feel fair.

• You’re less likely to have stress and anxiety surrounding household finances

The Cons

• Needs trust and more continuous communication.

• It takes more coordination to get on the same page, and to work towards your goals together.

The takeaway

If you and your partner share some accounts and keep others separate, it can help you both keep an eye on expenses, save towards shared financial goals, and reduce stress, anxiety, and fights about money.

Option 2: What’s mine is yours

The default for younger partners

These partners share everything, and usually they’ll combine their incomes in one joint account to pay bills and save for the future. Partners who choose this structure tend to have gotten married earlier, have had similarly paced careers, and or earn < $100k in combined income. We also see this more commonly when partners do not live in big cities.

Boomers are the most likely generation to have an “all in” with only joint accounts.

The Pros

• Keeps things simple. You share everything in one account and can manage finances as a team, if you’re on the same page.

The Cons

• If you’re not on the same page, saving and spending decisions can come under scrutiny and can cause resentment and control issues (especially if one person out-earns the other).

• If you decide to go separate ways, dividing assets and untangling financial accounts can be messy.

The takeaway

If you and your partner share one account, it's easier to manage your budget together. But, if you both have different spending and saving styles, it can also cause some disagreements.

Option 3: What’s mine is mine, and yours is yours

The default for established partners

These partners prefer to manage their own money without combining it with their partner's. This structure is most common for partners who get married in their late thirties or forties, or independently have a net worth of $1M+ each. Prenups are more of a default for partners in this category, too.

23% of partnered millennials keep their finances separate.

The Pros

• You have complete control over your money and your partner has control over theirs.

• You can make independent decisions on how to spend, save, and invest your own money.

The Cons

• Keeping separate finances can make it harder to work together towards common financial goals.

• Keeping everything separate can create a sense of distance in the relationship, making you feel like you're not fully part of a team.

The takeaway

When you keep your own accounts, it can prevent fights, but it also means more work to plan and action on things together, and you might miss out on the best way to handle your family's money.

Our bottom line:

Financial products aren’t designed for partners to manage money together. And the existing solutions still have only all-together or all-separate options. Until now.

We believe modern relationships deserve modern solutions with better flexibility to share some things and keep others separate. So at Plenty, we’re making it easy for every household to build wealth, as a team. 

About Plenty

Plenty is a wealth management platform designed specifically for couples. We go beyond budgeting, making it simple to invest, save, and grow toward your future goals by unlocking access to the financial strategies of the wealthy. Ready to get started? Sign up for free today.

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The information provided herein is for general informational purposes only and should not be considered individualized recommendations or personalized investment advice. The type of strategies mentioned may not be suitable for everyone. Each investor should evaluate an investment strategy based on their unique circumstances before making any investment decisions.

Investing involves risk, including risk of loss. Past performance may not be indicative of future results. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

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