When it comes to money, couples face a big question: Combine finances, keep them separate or do a combination of both?
Now, research finds that those who do pool their money are more likely to stay together.
The study, titled “Pooling finances and relationship satisfaction,” found that whether or not couples combine their money may make or break a relationship. The research focused on bank accounts and liquid wealth.
“We did see that couples who pool their finances are less likely to break up than couples who keep their finances separate,” said Emily Garbinsky, an associate professor of marketing and management communication at Cornell University, who co-authored the study.
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Supporting that idea, a survey from CreditCards.com found about 43% of couples who are married, in a civil partnership or living together have joint assets.
Baby boomers are most likely to have only joint accounts, with 49%, followed by Gen Xers, with 48%, versus just 31% of millennials, the CreditCards.com survey found.
Having joint accounts benefitted all couples, though the effect was stronger with some couples versus others, according to Garbinsky.
Low-income couples, for example, tended to see greater benefits of pooling their money.
The same also went for couples in more collectivist versus individualistic cultures, based on differences the researchers observed between Japan and the U.S.
The researchers also looked at online discussions regarding how couples handle money on forums like Quora and Reddit. Those who combine their finances were more likely to refer to “our money” versus those who kept it separate and were more likely to say “my money.”
“These simple pronouns over time reinforce these perceptions of being on a team versus not,” Garbinsky said.
The findings coincide with other research Garbinsky has done that finds many couples tend to avoid discussing money, she said.
“Couples admit that they don’t like talking about finances with their partner,” Garbinsky said. “They anticipate conflict.
“They think if they talk about their finances that they’re going to end up fighting about it.”
However, the research shows communication is a good thing.
Couples who openly talk about money are more likely to be on the same page and are better able to achieve their financial goals, she said.
Those who openly address money issues typically also manage their debts better than those who keep them separate.
“On average, what we see is that couples who end up talking about their finances reach some sort of consensus, and then it makes them feel like they’re on the same team,” Garbinsky said.
“Feeling like you’re on a team together with your partner promotes relationship satisfaction,” she said.
Couples who communicate about money are also more likely to avoid what is called financial infidelity, or withholding information or transactions from their partners. One poll from the National Endowment for Financial Education found 43% of adults have confessed to committing some form of financial deception. Men were more likely than women to admit they were guilty of such actions.
Financial advisors say while the way couples handle money tends to vary, communication should always be a priority. Ideally, a formal money conversation should happen at least once a year, according to Jesse Sell, a certified financial planner and managing principal at Prevail Financial Planners in Stillwater, Minnesota.
“Money can be a very emotional topic,” Sell said. “Talking about it regularly is important because if it’s not done intentionally, it kind of gets cast aside and never talked about.”