Should Couples Combine or Keep Separate Financial Assets?
Do you or do you not combine financial assets when you are just living together or after you are married? I suppose, there are pluses and minuses to each argument. The topic can and often does create tension and distrust between couples and there are arguments on both sides to substantiate their logic. Yes, even in a marriage, the tension and distrust seeps in when dealing with personal issues like this.
Some couples try to avoid the whole mess using a prenuptial (or legal document) that both sign listing what assets are their own private property is and what is not. This helps during a separation. But, it usually does not cover what is bought during the relationship.
In some relationships, the couple has one bank account and both earners toss their money into it and take from it. But, problems are just waiting to happen creating fighting and distrust and there is no way to ascertain who's money was used. This works if there is only one earner, yet, the same issues crop up regarding how much is being spent, on what, why, etc. Of course, having all money in one account to draw from forces the couple to build trust and teamwork, In this situation, compromise is often forced upon the couple. Yet, it only takes a few arguments to undermine this trust. If it gets bad enough, separate bank accounts are created. A joint account forces the couple to also plan and agree as to what to buy, how much to spend and other needs of the family, if kids are present.
Having separate accounts in addition to a joint home account is really the better way. The joint account allows both to contribute to it for community needs (food, home, entertainment) and each would agree in how much to contribute and both have access. The separate accounts allows for income to be controlled only by the owner. It is their property. These accounts help keep emotional harmony and maintain some control. Many get married much later in life and have accumulated a lot of personal assets. Allowing another access does take trust and even in love, there have been enough stories about insidious individuals that seemed fine. The separate accounts also allow the owners to continue with spending and saving habits when being single with the security that only they have access. It is peace of mind.
Of course, having separate accounts cannot be a secret and both should know about them and how much is in them to create trust and harmony. One of the big benefits for having separate accounts is a separation or divorce. It makes matters much easier if the accounts have never been shared and comingled to establish separate property. The joint account would just be split.
Unless the couple is willing to weather the pitfalls of combining assets, it is better to have one joint household account and each person has their separate account, if they want.
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