Should You Pool Your Money with Your Spouse
If you are combining your money, then you are in good company, because about 80% of couples do so. It seems to hold true no matter whether both partners are working or one is a stay-at-home parent. Most importantly, it offers many benefits for married couples.
This article will highlight the pros and cons of combining your money in a committed relationship.
What Combining Your Money Means
The simple definition is that both spouses have the bulk of their paychecks deposited into a shared checking account.
It usually is not your entire paycheck, because there are deductions such as 401(k) contributions and healthcare. There may be money being automatically transferred to a shared savings or investment account. In some cases, each partner may have funds deposited into their own separate bank accounts for personal expenses.
To summarize, it typically means most but not all of your take-home pay is deposited into a shared checking account.
Pros of Pooling Your Money
There are several strong arguments for combining your money. Most importantly it promotes and offers a sense of togetherness and the ability to share common goals. After all, a marriage is formed because you both desire to be a partner to each other.
Other benefits include:
- Increases the sense of “our” and lessens “yours or mine” money.
- Monetary decisions are made through the lens of how it effects your household budget.
- Can increase the feelings of a partnership and promote trust in a marriage.
- Eliminates any discussion about who pays for what.
- Makes budgeting easier.
- From a practical point, it makes bill paying easier and more transparent.
- Makes child raising expenses less complex.
- Offers more opportunities to have open discussions about your financial health.
Cons of Pooling Your Money
The most significant drawback is that there is no guarantee you will have a financially healthy relationship. It can be just as easy to avoid any discussion about household spending. It may create resentment if one spouse is solely responsible for bill paying, while trying to balance the needs and wants for the family.
Other drawbacks include:
- One spouse can withdraw funds without the other’s permission. This is not an issue when it’s for agreed upon expenses. However, it can cause friction if one is spending on purchases the other feels is not necessary.
- If one partner has poor credit history, it could impact the other person’s credit as well.
- It is more complicated should the relationship breakup or if there is a divorce.
Words of Caution
If you pooling your money both partners must have complete access to the bank account otherwise, there can be all sorts of surprises.
One example is a wife who contact me. She found out (a little late) that her husband had a gambling problem. Other examples are two widows, I know personally. After their husbands died, they found out their mortgages were months behind, unbeknownst to them.
It’s my observation and experience as a financial counselor that combining your money with your spouse or partner is not the cause of any financial strife.
Financial tension usually is a result of lack of communication. These include, misunderstandings, assumptions, an inability to talk about money without arguing or having the same argument over and over again without resolution. If you can’t communicate on your own together, then consider hiring a professional money coach or financial counselor as a third party.
Stuck on how to start the money conversation with your spouse? Read more here.