Generally speaking, the vast majority of couples—even unmarried couples—have at least one joint bank account.
But that doesn’t mean it’s the right move for you.
In fact, there are some pretty good reasons why you should not combine finances with your partner. At least not yet. Contrary to its primary mission, pooling your finances can lead to more financial stress, fights, and even compromise your credit score.
Tough stuff, I know. But relationships get stronger when you face hard things before.
So, without further ado, let’s look at five reasons why you should keep your finances separate from your loved ones.
one. Prevent the “team project” mentality
We have all been involved in group projects where at least one person has fully checked and shifted most of the responsibility to others.
Unfortunately, this also happens in groups of two, even if they love each other.
When there’s a joint account where couples pool money, it’s quite common for one half of the relationship to become the “money manager” while the other person loses focus, blackouts, and makes mistakes.
Often this happens subconsciously, but the end result is the same: conflict. The finance manager now has the added stress of managing finances for two people, and sometimes feels the need to deliver an unpleasant lecture.
In some cases, the less involved half of the relationship may even start making less money by overestimating how much their partner is willing to “take care” of their finances.
This is not to say that having one household manager—or breadwinner—can’t work. But keeping separate accounts can help you avoid stress and conflict in the first place.
Read more: How do you share expenses with your partner or spouse?
2. Less quarrels and surprises
“Hey baby. FYI, next Tuesday I’ll be getting Serena’s hair.”
Serena? Doesn’t she charge $120? I saved up for something.”
“You mean PlayStation 5? Can’t you wait another two weeks?
“Why is it always to me who has to wait until our next paycheck?”
When you and your significant other decide to “share” a total amount of money, there can sometimes be arguments about how and when to spend it.
They can often be exacerbated when one partner doesn’t understand—or doesn’t appreciate—what the other is trying to spend money on. Kate can do a particularly beautiful haircut to impress Yulia’s parents. Yulia may need a PS5 to take her mind off her new job and play online with her nephew.
But without this transparency and communication, both partners may feel like the other is spending their shared money unnecessarily.
A 2012 study published in the journal Family Relations found that financial disagreements are the #1 predictor of divorce. This does not mean that sharing finances increases or decreases your chances of divorce. Rather, you should carefully consider whether sharing accounts will result in more or less fighting.
3. Some save, some spend
Being more transparent with each other is one thing. Changing spending habits for a lifetime is another.
Simply put, sharing money can be a real challenge when one finds comfort in saving and joy in spending.
The more modest half of the relationship may feel like their partner is spending money recklessly, not practicing financial mindfulness, acting materialistically, or even holding them back from buying a house or reaching other important financial milestones. They may just want their partner to think more about the future in general.
Meanwhile, the more spendthrift half of the relationship may feel like their partner is being overly frugal, stingy, or making financial decisions based on fear. They may just want their partner to spend a little, live a little, and enjoy some of the best things in life before cashing out their 401(k).
Separating finances will allow both partners to continue to practice their existing money habits unhindered. So you can still teach your partner to save more or live a little without risking your money and comfort.
four. It makes separation less messy
How can I make it sound less harsh?
Sometimes when two people love each other, but…
Do you see when…
Ah, forget it. Here it is:
When you break up, your partner may empty your joint bank account and disappear.
Or hold money hostage.
“After a divorce, people do weird things with money,” Wendy Alten, a certified divorce financial planner, told Forbes.
“Money is one of the #1 reasons for divorce, and if it is already a source of contention, it can lead to the partner emptying the account or using money as a bargaining chip.”
Of course, this money can usually be returned during the divorce proceedings, but if you and your partner are not married, there is a much higher risk that they will get away with it, because technically it is also “their” money.
“Under banking law, your ex became joint ‘owner’ of all of your funds in joint bank accounts when you told the bank to add him to the accounts.” writes Bruce Minnick, a banking lawyer in Tallahassee, Florida.
It goes without saying that until you trust your partner fullyfor now, it’s best to keep your finances separate.
Read more: More Millennials Are Getting Marriage Contracts—Here’s Why You Should Think About It Too
5. It protects you from your partner’s bad money habits.
I have a dear friend whose husband flew to Vegas for a bachelor party and lost $42,000 from their joint bank account.
Keep in mind, the previous balance was $42,138.
Her partner’s mistake not only wiped out 99.7% of her savings, but also made it harder for her to pay for her car, student loans and other bills, which in turn hurt her credit score.
Read more: How Credit Works: Understanding the Credit Reporting System
If your partner hasn’t learned how to handle money responsibly or has an addiction that leads to overspending, it’s best to keep your accounts separate while they get the support they need and develop healthier habits.
Of course, having separate finances does not prevent you from helping them. You can help them pay for rehab or personal finance classes, help them improve their credit score (here’s how), or help them create a smart budget—all without risking their financial well-being.
Read more: 5 steps to create a really working budget
When Merging Finances Still Makes Sense
However, there is a reason why 72% of millennials and 89% of Gen Z couples have at least one joint bank account. And why about four out of five say they don’t regret their decision.
Here are a few cases where merging finances still makes sense:
When there is a big difference in income
When one of you makes a lot more money than the other—let’s say you’re an investment banker and your partner is a student—merging finances can be a move. Couples with large income disparities find this more convenient, saving Venmo’s countless requests for daily grocery trips.
When children are involved
Raising a child is, of course, one big common expense. And unlike a rent or a mortgage payment, it’s not easy to split it in half once a month.
That’s why couples with kids end up sharing at least one account for child-related expenses, another for college fund, or just sharing everything if one of the partners becomes a stay-at-home parent.
Benefits of Joint Submission
Married couples who file taxes jointly can save time and money. For example, joint filers have a higher income threshold for certain tax credits, such as deductions for IRA contributions.
Read more: What can love do? Financial Benefits of Marriage
For transparency and a sense of teamwork
By sharing your finances, it will be easier for you to see what your partner is spending on, so that you can be accountable to each other for your goals and celebrate milestones together.
“My wife and I have pooled our assets since we got married and it makes us feel like a real team,” says David Hunter, director of research and investment at CPC Advisors in Atlanta.
“We never have disagreements about who should pay for this or who should pay for that. If we have a great year, we will share in the success.”
Even though most couples pool their finances to some degree, that doesn’t make it right for everyone. If you’re not sure yet, this is a good sign that you should keep them separate until you have had a long, honest, and transparent conversation about it.
Again, getting over difficulties faster is what makes a relationship strong.
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