Why My Husband and I Didn’t Merge Our Finances
Many people in a committed relationship prefer to merge their bank accounts, but for many reasons, couples shouldn’t merge finances.
Originally published 7/24/21.
A topic that comes up in conversations a lot when people get engaged—aside from whether or not they need a prenup—is if they should merge their finances or use joint accounts exclusively. I personally think this is a very dangerous mindset to have and strongly believe everyone should keep their retirement and personal accounts separate in any relationship.
Combining all financial accounts was fairly common back when your parents or grandparents were getting married. In fact, up until 1974, an unmarried woman couldn’t even open a bank account in her own name without some male cosigner. You could essentially be more financially responsible than your cosigner, but you’d need him to get a bank account.
It’s quite likely that because of this, society lagged behind when it came to how women should control their money, and as a result, it took a while for people to even consider not combining finances at all.
We had assets before the marriage
Like many people of our generation, Mr. Green and I got married in our thirties. People are getting married a lot later than they were a generation ago. My mom got married when she was twenty-two. I had never truly fallen in love by that age (though I certainly thought I had), so it boggles my mind to think there was a time when someone had wanted to get married that young.
These days, people are learning more about themselves and living their lives long before they settle down and tie the knot. Couples are likely to have their own assets and even their own debts before marriage.
Mr. Green owned his car and had a 403b, Roth IRA (which needs to stay in one name anyway), and substantial savings. I had my own retirement accounts and healthy savings as well. Why would anyone want to essentially give all of their savings to someone else? In a joint account, one partner could drain the account, and then where does that leave you?
We want to maintain our independence
I know of couples who share every account jointly. While this may keep them from overspending in certain areas, unless one of you has already shown a pattern of irresponsible spending habits, do you really want your spouse to see everything you purchase?
How are you going to buy a gift for them if every account you have is held jointly? If one of you is withdrawing more than you think is fair for discretionary spending, what can you really do to protect your own savings?
Mr. Green and I have one single joint account. It pays for our mortgage, HOA, and utility bills--and that’s it. We leave a $100 cushion in the account in case one bill is higher than usual. We contribute the higher amount later to compensate and keep $100 extra in it.
With only one joint account and individual accounts for each of us, we don’t have to worry if the other one is spending too much or not saving enough, and when we review our financial status every year, we can determine at this point if we need to make changes. Mr. Green’s sushi dinners don’t keep me up at night, and the pricey pet food I buy doesn’t make him roll his eyes. We have our own money and can do with it what we want, within reason.
It’s easier to determine whose money is whose
Our prenup states that all accounts held in one person’s name will remain with that person in the event of a divorce. My ex-husband Poker also held only one joint account with me. Everything else belonged to each of us. We didn’t even close our joint account when we got divorced because I had only contributed what I was supposed to each month to cover our bills, so there wasn’t anything extra that belonged solely to me.
When you keep your money separate, it makes it easier to divide your assets if you need to part ways. And you have the opportunity to save your own money and keep 100% of that money if you need to start over.
Combining all finances can lead to abuse
Lately, Suze Orman has shed a lot of light on financial abuse in her podcast. Financial abuse “includes behaviors to intentionally manipulate, intimidate, and threaten the victim in order to entrap that person in the relationship.” Mr. Green thinks that Poker was financially abusive to me. I see some of his actions in the list on the National Network to End Domestic Violence, but I don’t feel that he was quite as manipulative as an abuser. Or maybe I don’t want to believe it.
If all of my accounts had been combined with Poker’s, I would not have been able to afford to leave him. I would have felt trapped, and I did feel trapped even before we got married. As you may have learned in my post about why he and I should have gotten a prenup, I had paid off his mortgage with some of my inheritance. Because I did this before we got married, even though our relationship was in a bad place during our engagement, I felt that I had to marry him since I’d already wasted money buying his house.
I don’t want you to have to suffer what I did in my divorce. I don’t want you to wonder whether or not you can afford to leave someone you don’t love or who is treating you poorly. I don’t even want you to worry that your partner is blowing money on something you don’t need and risking your retirement savings.
If you save your own money and have your own accounts (and don’t pay off people’s mortgages without a real estate lawyer involved), none of this will be something you have to worry about. And not worrying about money is a luxury that we all deserve.