When To Consider Separating Finances In A Relationship

When to Consider Separating Finances in a Relationship

It's assumed that when you marry or live with someone, you combine finances. That works for a lot of couples, but not all of them. In some scenarios, keeping your finances separate might be a better option.

Picture: Ed Yourdon/Flickr

If you and your partner have fundamentally different ideas about spending, Credit.com suggests:

There are many variations on the split-finances approach: From a spending angle, you could maintain a joint account to which you both contribute for shared expenses, like the mortgage and utilities, and the rest of your money stays in your own account. When it comes to savings, you could save on your own but have shared goals, like each person setting aside 10% of his or her paycheck for retirement.

Financial advisor Laurie Itkin suggests a similar approach. In an interview, she told me she's very frugal while her husband is more of a spendthrift. To compromise, they have a joint account and separate individual accounts for spending money as they please. Of course, they come to an agreement on the amounts in each account.

You might also consider keeping things separate if you don't share debt. If one person brings a great deal of student loan debt into the relationship, for example, they may feel its their responsibility to pay it off, and it could be easier to tackle this with separate accounts.

There are strong opinions on both sides of this argument. In the end, it's a personal decision that depends on your relationship and financial situation. And there are some valid scenarios in which you might consider keeping things separate. For more detail, check out Credit.com's full post.

3 Signs You Should Split Up Finances [Credit.com]


    Before I was married, I considered one of the major shortcomings of divorce being that I lost half my asset base, income, etc.

    Now I am married and don't see a cent, my attitude has shifted. You get to keep half!

    If you have a mortgage on a house you cohabit, it makes sense to have all of your collective cash in an offset account . Running separate non-offset accounts is just chucking money away on increased interest payments.

    Regarding spending habits ... talk to one another and work it out together. Which is what being in a relationship is all about.

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