Prior research suggests a correlation that couples who merge finances tend to be happier than those who do not. This study is the first to prove that married couples with joint bank accounts not only have stronger relationships, but also experience fewer money-related conflicts and feel more satisfied with how their household finances are managed.

Jenny Olson, an Assistant Professor of Marketing at Kelley, found that combining bank accounts strengthens relationships more than keeping them separated or partially merged. This was discovered when they surveyed couples of different relationship lengths. They frequently told us they felt more like they were ‘in this together.’

This is the strongest evidence we have so far regarding a question that can determine a couple’s future. The fact that we see significant changes over a two-year period is a powerful testament to the advantages 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 team studied 230 engaged or newly married couples for two years to understand their early married life. 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.

According to Olson, couples who opened joint bank accounts reported better relationships two years later compared to those who had separate accounts. Merging accounts promotes unity in financial goals and transparency, which can lead to a better understanding between partners.

“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, for 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.

According to research from the Indiana University Kelley School of Business, married couples who manage their finances together may love each other longer. The study suggests that couples who merge their finances tend to be happier than those who do not. However, this research is the first to show a causal relationship between joint finances and better relationships. Having a joint bank account can improve the relationship and financial management of married couples. They have less money-related arguments and feel more satisfied with how their household finances are handled.

A study called “Common Cents: Bank Account Structure and Couples’ Relationship Dynamics” will be published in the Journal of Consumer Research. The study followed 230 couples who were either engaged or newly married for two years as they started 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.

The couples were randomly assigned to keep their separate bank accounts, open a joint bank account, or decide for themselves. After two years, couples who were told to open joint bank accounts reported substantially higher relationship quality than those who maintained separate accounts. According to Jenny Olson, an assistant professor of marketing at Kelley and one of the authors of the study, combining finances can assist couples in bringing their financial goals together, being more open with each other, and fostering a stronger sense of unity within their 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 commented. “There’s a ‘we’ perspective, which we theorised would be related to a joint bank account.”

Couples who have separate accounts tend to see financial decisions as a trade-off, like “I’ll help you now, and you can help me later.” This is what the research shows. They are prepaying for later favours, 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.”

The study 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.

Olson said that couples with separate accounts potentially believe it is easier to leave the relationship. Twenty percent of participating couples did not finish the study, including a significant percentage of those who separated after not merging bank accounts.

Olson believes that this study is the best evidence to date for a question that shapes couples’ futures. She said, “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 study’s other 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.

Ref:

Olson, J.; Rick, S; Small, D.; Finkel, E.J. “Common Cents: Bank Account Structure and Couples Relationship Dynamics” Journal of Consumer Research, 2023