Pros and cons of combining accounts

Love. When two people come together against all odds to become one. One heart, one life and one… bank account? Well, maybe if you are combining accounts! Every couple approaches finances differently, varying based on their wants, needs, individuality, interests, ability to communicate and more.

One method some couples choose is completely combining bank accounts, truly making them two halves of a whole. And sure, it can simplify some things in your relationship, but it can complicate others. Whether you’re coming up on your 50^th anniversary or you’re still in the honeymoon phase, knowing the pros and cons of combining accounts can lead to more open and honest communication about money in your relationship. Here’s what you should know!

What does it mean to combine accounts as a couple?

Combining accounts might sound simple, but you might be surprised when you think about what it entails. It’s not just having a single bank account together or making a joint plan. It is a complete and total joining of your finances, putting everything in one big pot, ideally for the betterment of your relationship.

That can include checking accounts, savings accounts, investment accounts, insurance policies, estate plans and more. Everything goes into one fund that both of you use, essentially indicating that you’re not just together, but you’re committed to being together and working together for the long haul.

Pros of combining accounts

For some couples, combining accounts is the right move, and it comes with some positives that highlight the best parts of being in a relationship. Here are a few of those pros:

Unification and simplification

From a practical perspective, combining finances makes budgeting simpler because all your income and expenses are kept in one place. It can also make it easier to track progress toward major goals, like a home, retirement or a dream vacation.

A feeling of togetherness

More than money, combining finances can foster a sense of unitedness. It gives you a shared goal and makes you one beyond just your bank accounts. That can help you feel closer, build trust and push you to think more about the “we” than the “me.”

The perception of more financial power

What could feel more powerful than two people taking on one set of bills? Sure, you might have two mouths to feed or two car payments, but you could have one mortgage, one utility bill and a second person to help you invest in long-term belongings you’ll need.

Cons of combining accounts

While the sense of togetherness and financial power might sound great, combining finances may not always be the right choice for every couple, which is completely okay! Here are a few drawbacks to consider when making your decision:

Loss of autonomy

When you combine finances, you can potentially lose much of the individuality you had when you were on your own. While that’s not always a bad thing, it’s something you have to be ready for, knowing every dollar you work for will go toward the “greater good.”

Potential conflict

This is why open and honest communication is the most essential part of combining finances. Without it, one person could feel like they’re contributing an inequitable amount, or that they don’t have enough for their interests. It takes a complete mindset shift to prevent money from becoming a major source of strain in your relationship.

Relationship changes

No one likes to think about the possibility of their relationship ending, but what if it does? Untangling your finances makes the split even more difficult, especially when your circumstances might make you harbor more negative feelings for the other person that you didn’t hold when you first fell in love.

What are some of the alternatives?

One of the easiest alternatives to completely combining finances is keeping everything separate. It won’t be too different from when you were single, completely managing your own money, your own budget and your own income. Oftentimes, even couples who keep their accounts separate still find a way to work together as a team, sharing costs, assuming responsibilities and supporting each other financially and emotionally.

Another choice is combining some accounts and leaving others separate. That could mean having a single joint checking account you both contribute to, as well as individual checking accounts. It could also mean having joint investment accounts. What you choose to combine or keep separate is often unique to your relationship, and it’s one way to personalize your circumstances to yourself and your partner.

Whatever you choose, remember to continue to open the floor to honest, judgement-free discussion.  Here are some tips that can help! If you’re looking for the right financial partner for your relationship, open an account today!