The Case for Merging Finances in Marriage

A recent Wall Street Journal article about how to plan finances as a couple when one spouse freelances recently captured my attention. The sub-header read, “When one income is steady and the other inconsistent, finances get tricky.” Sounds familiar. As a woman who freelances married to a man who doesn’t, I clicked.

I was surprised, however, by how much of the article assumed married couples keep separate finances. Isn’t that already tricky without factoring in an inconsistent income? Yet most of the couples profiled had separate finances. And the advice for the more sharing-oriented couples still proposed things like treating dual incomes as separate streams of revenue to be divided according to identical percentages or diverted into different accounts.

Unthinkable not too long ago, when few women could have maintained financial independence, divided finances are increasingly normal. A recent survey by American Express found that 31 percent of married or cohabiting couples have separate checking accounts, and 23 percent keep separate personal savings accounts. Another survey found that closer to half of couples with joint accounts also maintain separate accounts. Women place a special premium on maintaining separate accounts; 43 percent of women with such accounts, versus 34 percent of men, said the idea of “independence” motivated them to do so.

Women are also more likely to freelance than men, perhaps because of the desire for flexibility that comes with children. Add to that the fact that only women bear children, and the result is that women are more likely to face irregularity or interruptions in their income, be it because a check from a contractor is late in the mail or because a new baby necessitates time off without pay. All this would suggest that it is women who benefit the most from the increased security and stability that comes with combining incomes and viewing all of a couple’s earnings and costs as shared.

Many women today no doubt worry that they are sacrificing their financial independence when they are getting married. But in pooling income and expenses with their husbands, they are actually establishing a platform for financial equality, which comes into sharp focus once children arrive. New mothers often find their earning power to be diminished, at least temporarily. This typically comes in tandem with a new and sizable expense: childcare. It is the women who have gone all in financially with their husbands that are in the best position in terms of fiscal equality and independence.

I was stunned when a friend who maintains largely separate finances from her husband told me that almost all of her income was going towards childcare now that they had had a second child. Her husband contributed nothing. It is very common to view the woman’s income as “covering” the costs of having children, and decide whether she should stay in the workforce based on whether her salary covers the cost of childcare. Jessica Grosse touched on this in a piece for the New York Times’ “Motherlode” blog succinctly entitled, “Why Do I Think My Salary Pays for Child Care?” She says that even among couples that share their wealth, the tendency is to “earmark” the wife’s income for child-related costs.

Grosse has written elsewhere that not only is it anti-egalitarian to view the wife’s income as covering expenses related to kids, but that it’s a waste of energy. Separate accounts just don’t make sense for parents: “If you have to hash it out every time your kid needs new shoes,” she writes in Slate, “that’s going to create stress.”

Maybe that’s why some research suggests that couples who share money are happier. Spouses who pool 80 percent of their income are on average happier than couples who pool 70 percent, and so on. It’s not as simple as having the money all in one place, though, as is made clear by a recent article in the New York Times about wealthy women in New York City’s Upper East Side receiving “wife bonuses” that they must “earn.” (Thankfully that arrangement seems to be vanishingly rare.) It’s possible to share all resources in theory and still have an unequal arrangement regarding them in practice.

But marriage is the ultimate communal experience, and trying to resist financial unity just complicates things and, ironically, diminishes female independence in the long run. A couple that enters marriage sharing all income and expenses places the woman, in particular, on a firm footing of financial equality that will empower her to make decisions after having kids without feeling the need to negotiate or explain. It empowers her to trade consistent income, or any income, for other things she might want, like time at home with her children or a chance to explore her passion. It can be tricky, sure, but less so if the couple is all in on every last penny.