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How couples manage money together varies from generation to generation.
Generation Z adults, or those between the ages of 18 and 27, are the most likely to keep their finances completely separate from those of their significant other, at 38%. In contrast, baby boomers, or adults between the ages of 60 and 78, are the generation most likely to fully combine their finances with a spouse or partner, at 44%.
Bankrate surveyed 2,233 U.S. adults in December, including 1,124 who were married or living with a partner at the time of the survey.
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“One thing that comes up is the anxiety of, ‘Will I lose my autonomy if I consolidate my finances?’” said financial therapist Lindsay Bryan-Podvin, a behavioral finance expert at Bread Financial.
According to a recent survey by the financial services firm, nearly half, or 46%, of people in relationships keep their finances separate to avoid losing their financial independence. It surveyed 1,659 U.S. adults in early January.
“We don’t want our partner to turn into a pseudo-parent,” Bryan-Podvin said. “When we lose financial independence, all of a sudden we get this dynamic of checks and balances against equality.”
Among cohabiting couples, 36% of those earning less than $50,000 a year in household income keep their finances separate, Bankrate found.
“Low-income families are often young adults,” said Ted Rossman, senior industry analyst at Bankrate. “The intersection of young adults who also have lower incomes may help explain some of the divisions.”
“In a low-income family, finances are more likely to remain separate for a variety of reasons,” Bryan-Podvin said. There is a greater likelihood that they may have some anxiety about financial institutions and may do things outside of traditional banking systems, he said.
There can also be some sense of shame about the amount of student loan debt or credit card debt young adults carry with them, Bryan-Podvin said. Separate finances can allow them to keep these financial challenges private.
Gen Zers also grew up with a phone in their hand or with ready access to apps and technology, something previous generations lacked, Bryan-Podvin said.
Therefore, they may not see the need for joint financing, especially when they could easily contribute to a joint expense via apps like Venmo or Zelle.
“It’s much easier to send and request money through a bunch of different apps,” Bryan-Podvin said. “It’s just part of the intertwining with the technology that they have and how that piece is a little more normalized.”
However, not all Gen Z couples keep their finances separate: About 34% of Gen Z couples who live together combine their finances completely, while 28% have a mix of “yours, mine, and ours” , Bankrate found.
While financial independence may be a priority for some couples, there are some benefits to joining forces.
About 38% of cohabiting couples have a mix of joint and separate accounts, while 24% keep finances completely separate, Bankrate found.
Experts suggest that couples should consider considering a “yours, mine and ours” financial framework because it can help couples get the best of both worlds: individual accounts offer some financial independence within the relationship, along with joint accounts for shared obligations.
“Yours, Mine and Ours can alleviate a lot of those concerns,” Rossman said. “This can be a healthy way of managing money as long as you agree on a regulatory framework.”
Money can be a major source of arguments between couples, or even “financial infidelity,” or the practice of keeping certain purchases or financial realities secret.
Nearly half, or 48%, of couples admitted to secretly making a financial decision without consulting their partner, Bread Financial found.
Around 16% of coupled respondents hid a purchase from their partner while 22% admitted to withholding their credit card balance. Additionally, 12% of male respondents said they had hidden cryptocurrency ownership from a partner, compared to just 4% of women, according to Bread Financial.
However, couples who value the idea of financial independence need to have open and honest discussions about money, Bryan-Podvin said.
If you and your partner decide to combine finances for shared responsibilities, discuss how much each person should contribute to the shared account. Such talks also help you come to terms on giving each other some financial autonomy, she said.