Married couples who merge finances may be happier, stay together longer

BLOOMINGTON, Ind. — The Beatles famously sang, “Money can't buy me love,” but married couples who manage their finances together may love each other longer, according to research from the Indiana University Kelley School of Business.

Prior research suggests a correlation that couples who merge finances tend to be happier than those who do not. But this is the first research to show a causal relationship — that married couples who have joint bank accounts not only have better relationships, but they fight less over money and feel better about how household finances are handled.

“When we surveyed people of varying relationship lengths, those who had merged accounts reported higher levels of communality within their marriage compared to people with separate accounts, or even those who partially merged their finances,” said Jenny Olson, assistant professor of marketing at Kelley. “They frequently told us they felt more like they were ‘in this together.’

“This is the best evidence that we have to date for a question that shapes couples’ futures; and the fact that we observe these meaningful shifts over two years, I think it's a pretty powerful testament to the benefits of merging. On average, merging should warrant a conversation with your partner, given the effects that we're seeing here.”

The findings appear in the article “Common Cents: Bank Account Structure and Couples’ Relationship Dynamics,” which will appear in the Journal of Consumer Research.

Olson and her co-authors recruited 230 couples, who were either engaged or newly married at the time, and followed them over two years as they began their married lives together. Everyone began the study with separate accounts and consented to potentially changing their financial arrangements. This was the first marriage for everyone involved in the study.

Some couples were then randomly assigned to keep their separate bank accounts, and others were told to open a joint bank account instead. A third group was allowed to make the decision on their own.

Couples who were told to open joint bank accounts reported substantially higher relationship quality two years later than those who maintained separate accounts, Olson said, adding that merging  promotes greater financial goal alignment and transparency, and a communal understanding of marriage.

“A communal relationship is one where partners respond to each other’s needs because there’s a need. ‘I want to help you because you need it. I’m not keeping track,’” she said. “There’s a ‘we’ perspective, which we theorized would be related to a joint bank account.”

Olson said that couples with separate accounts viewed financial decision-making as more of an exchange.

“It’s ‘I help you because you’re going to help me later,’” she said. “They’re prepaying for later favors, and that’s tit-for-tat, which we see a bit more with separate accounts. It’s ‘I’ve got the Netflix bill and you pay the doctor.’ … They’re not working together like those with joint accounts — who have the same pool of money — and that’s more common in business-type relationships.”

With separate accounts, those in a marriage potentially may think it is easier to leave the relationship, Olson said. Twenty percent of participating couples did not finish the study, including a significant percentage of those who separated after not merging bank accounts. They found no gender differences in the results.

The mean age of participants was 28 years old. Three quarters were white, and 12 percent were Black. Thirty-six percent had a bachelor’s degree and a median household income of $50,000. Couples had known each other, on average, about five years and had been romantically involved for an average of three years. Ten percent had children.

Other study authors are Scott I. Rick, associate professor of marketing at the Ross School of Business at the University of Michigan; Deborah A. Small, the Adrian C. Israel Professor of Marketing at the Yale School of Management; and Eli J. Finkel, professor of management and organizations at the Kellogg School of Management and a professor of psychology at Northwestern.