Talking about finances as a couple is not always comfortable; money has often been the cause of marital conflict. Aligning your financial goals and philosophy can be a difficult process that begins with answering a simple question: joint or separate accounts?

For some couples, money is either taboo or a bone of contention that never ends up being satisfactorily settled. At the superficial level, it seems like it’s just numbers, but behind those numbers there can be—aside from the differences in financial priorities—a plethora of emotions (from shame to insecurity) that mediate the relationship with money, money management models inherited from childhood, or frustrations related to other aspects of the couple’s relationship that are more difficult to control than money.

The inability to agree on the best way to manage finances can erode the marital relationship. But, most likely, no other conflict on this topic alters trust between partners as much as financial infidelity.

How financial infidelity happens

After four years of being in a relationship, Kirsten only found out that her future husband was hiding information about his debts when they tried to get a loan to buy a house. They had already been saving for this purpose for some time, but when they met with a financial adviser Kirsten learned that they would not get the loan because of the £20,000 her partner already owed the bank.

Discussions, accusations, and explanations ensued but the couple decided that their relationship would manage to overcome this crisis and that, in the future, transparency regarding money would have to be an inviolable principle. A decade later, after the debt had been paid off, the two had gotten married, and had obtained a mortgage, Kirsten discovered that her husband was once again buried in debt. Not only were the amounts he owed now far greater than in the past but he had also turned to friends for loans, which ruined their social life—and, eventually, their marriage.

Covering a wide range of behaviours—from surreptitiously spending money from your combined accounts and withholding information about your own income, to secretly buying expensive things and taking out loans without your partner’s knowledge—financial infidelity is not nearly as rare as you might believe.

Approximately 3 out of 10 respondents of a survey carried out by U.S. News admitted that they had dealt with financial infidelity (either from the position of victim or from the position of perpetrator). The main forms of deception were concealing purchases (31. 4%) followed by hiding debts or accounts (28.7%), lying about income (22.6%), draining money from savings (10.4%) or lending money without the partner’s consent (6.9%).

The main reasons that guilty partners gave as an explanation for their behaviour were the desire to avoid an argument (38%), shame about mishandling money (23.1%), the desire to be in control financially (16.1%), to help another person (15.8%), and to avoid giving bad news (7%). Almost 20% of the respondents declared that they separated from their partner after discovering the financial infidelity and 29.3% decided to manage their money separately, while the majority of subjects (42.6 %) decided to discuss their finances regularly.

The effects of dishonest behaviour related to family economic issues can be devastating, a study carried out in 2010 by the NEFE organisation showed: 76% of couples who had experienced financial infidelity reported that it had a negative impact on the relationship, and 10% of the respondents stated that it led to divorce.

Over 60% of those surveyed believe cheating is cheating, whether it’s financial or sexual, and two-thirds said being financially honest is just as important as remaining monogamous. A third of the subjects believe that financial infidelity can sometimes lead to sexual infidelity.

“Just like sexual infidelity, financial infidelity is a very serious breach of trust,” says financial advisor Kimberly Nelson, explaining that the fear of discussing financial issues with a partner (a fear invoked by some of those who cheat financially on their partners) shows that relationship problems can be masked by financial problems.

“If you’re stashing money away, you’re not really in the relationship entirely. You’ve got one foot out,” says psychotherapist Susanna Abse. Lack of honesty about money is not an accident, it’s a calculated chain of lies, which is why being cheated financially by the person you share your life with can be more painful than experiencing sexual infidelity, Abse believes.

Could separate accounts be a solution not only for financial infidelity but also for many of the money conflicts that arise between couples? Specialists present both pros and cons of keeping finances separate, emphasising that each choice must be based on the values ​​and objectives of the couple while also taking into account the financial past of both partners.

Does keeping finances separate save the relationship?

The generations that came after baby boomers have a different perspective on family money management, according to a 2019 survey, which found that 37% of millennials and 36% of Gen Xers prefer to manage their money without their partner’s involvement. Also, 62% of millennials and 56% of Gen Xers say that money is one of the sources of stress in their relationship.

There isn’t any rule that says every penny earned by partners should be put into a joint account, says counsellor Stephanie Sarkis in an article that explores the idea that separately managed money could avoid many marital conflicts, and it could even save the relationship.

Sarkis notes that there are several options for those who want to manage their money separately, such as joint accounts for household expenses and separate accounts for individual expenses, splitting the bills, or dividing expenses based on each partner’s income. She recommends that decisions related to money management be taken only after analysing several elements, including differences in financial vision and the frequency of conflicts on this topic.

Experts who have studied the beneficial effects of couples keeping finances separate believe that this option is the safest in case the relationship doesn’t work out and it is the right choice if one partner earns more or has higher debts than the other, says Professor Gary Lewandowski. However, the downside of this way of money management is that it can also decrease commitment to the relationship.

Separate finances are a way to defuse money conflicts, says financial planner Kelley Long. Even if they have a joint account from which they pay the bills, spouses also need amounts over which they have total control in order to preserve their autonomy and financial independence, says Long. Separate accounts eliminate many of the marital conflicts that arise when one partner is a saver and the other a spender, and it’s a sign of maturity to be able to recognise that there are fundamental differences between partners, including in terms of financial habits.

The most important argument, in the financial planner’s view, for keeping separate accounts remains the reality that eventually many married people will be left alone (as a result of either divorce or the unexpected death of the other)—circumstances that are traumatic enough without the need to relearn how to manage daily finances.

In cases of financial abuse, where the abuser uses money to control their victim and prevent them from leaving, keeping some money separate could be helpful to the victim; other situations in which keeping finances separate can prove useful are those in which the partners have been married before and have children from previous relationships, writes Erin Lowry, a financial journalist.

Even in healthy relationships, people may want to have separate accounts, says Lowry, noting that sometimes the need to control some of their own money doesn’t stem from frustration with their partner’s financial behaviour but from needs that originate in family history or past experiences.

Shared money and marital satisfaction

Many personal finance experts advocate a hybrid approach where partners jointly manage a portion of their income but each keeps a portion for their needs and hobbies that they manage as they see fit.

In the end, the right answer to the shared or separate finances dilemma is always the one that helps maintain the harmony of the relationship, concludes financial planner Jesse Sell.

Couples who manage their money together are more satisfied with their relationship, found a 2010 study of low-income couples, one of the few studies that analysed the correlation between financial management and the quality of a couple’s relationship.

Previous studies have shown that divorced people tend to separate their money from their partners in subsequent relationships, that partners who live together without being married are less likely to manage money together, or that, in the case of couples with shared goals, the most common option is the combined approach to family money. Keeping and spending money together was also associated with a greater commitment to the future of the relationship and strengthening the relationship by focusing on shared interests rather than individual interests.

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couples’ money management

Couples who pool their incomes not only say they are more satisfied with the quality of their relationship, but are also less likely to break up, concluded a 2022 study, which found that the beneficial effects are particularly strong among low-income couples. The study failed to provide solid evidence of causality—perhaps a shared wallet makes couples happier, or conversely, perhaps happily married partners decide to share everything, including the money they earn.

Despite the lack of clarity of the results, Cassie Mogilner, one of the authors of the study, states that, following the research, she decided to manage most of the family’s income together with her husband. “It creates a sharedness… It was a one-time decision that… plays out in a general sense of ‘we,'” said the researcher.

Building this sense of “we”, “together”, and “ours” remains the most important achievement in a world where more and more people keep, like an ace up their sleeve, an emergency exit from a love that they promised not to abandon until the last heartbeat.

Carmen Lăiu is an editor at Signs of the Times Romania and ST Network .