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  • It's a big day!

  • You just moved in with your boo and you're totally rocking this living-together thing.

  • But then comes the first rent bill and you're stuck wondering...how do we handle this?

  • If you asked your grandparents how they handled finances back in their day, you might

  • be met with some weird looks.

  • After all, when they moved in together, they were most likely already hitched and it was

  • just assumed that they'd immediately combine every aspect of their separate lives.

  • The house, the Studebaker, Aunt Mildred's antique tea set...everything became family

  • property.

  • Including the bank accounts.

  • In 1960, 65% of children grew up in a household where the mother was a homemaker and the father

  • was the breadwinner.

  • Today, only 22% of children grow up that way.

  • From a dramatic rise in women being the breadwinners to falling marriage rates the relational and

  • economic landscape has changed dramatically.

  • These days, 25% of parents living with a child are unmarried and 35% of unmarried parents

  • are cohabitating.

  • So the question is: should you consolidate finances, and continue a time-honored tradition?

  • Or is maintaining financial autonomy more important?

  • When we asked you on Twitter, 79% of you said you combine all or some of your finances with

  • your partner.

  • And this tracks with national trends.

  • But this is changing.

  • Millenials that live together are now more likely to keep separate finances than any

  • previous generation.

  • And it turns out there are some pretty compelling advantages to keeping your finances separate

  • as a couple.

  • Americans with student loan debt carry an average of over $32,000.

  • And the typical American is floating over $6,000 in credit card debts.

  • With numbers like these, it's easy to understand why one partner might feel guilty burdening

  • the other with something that wastheir problem”.

  • Or perhaps you've been in or witnessed a financially abusive relationship in the past.

  • Separate accounts can help protect you if serious problems arise.

  • If you've ever known somebody that suffered from a gambling or substance addiction, you

  • know first hand the financial devastation that can follow.

  • But let's be real - the main reason people keep separate finances is to maintain their

  • independence!

  • In modern society, it's completely normal to enter your 30's without ever sharing

  • your finances with anyone else.

  • As your lives begin to merge, it's understandable

  • to feel protective about your autonomy.

  • You've never had somebody telling you what you can and can't buy before.

  • Why start now?

  • And if you don't have to talk about it, you don't have to fight about it, right?

  • As attractive as it might be goLone Wolf”, there are some good reasons the majority of

  • couples still combine finances.

  • So let's look at what theShared Approachhas going for it.

  • When money is shared, you can work efficiently toward big goals like debt reduction.

  • Buying a home is easier when you have both of your incomes and credit histories available

  • to work with.

  • And if you plan on spending retirement together, pooling resources makes a lot of sense.

  • Think about it: is one of you gonna spend your golden years in a nice condo and the

  • other in the tool shed?

  • Probably not.

  • Shared finances can also protect you against unexpected pitfalls, like an injury or layoff.

  • And if you enter a tight season by choice-- such as taking time off to start a family

  • or navigate a career transition - anyone will tell you what a game changer it is for somebody

  • to back you up financially.

  • Shared cooperation and transparency can also result in a healthier, longer-lasting relationship.

  • A 2018 study found that 20% of relationships that don't share finances end because of

  • money problemscompared to only 4% of relationships that do.

  • And a series of five university studies found that couples who pool all their money are

  • happier in their relationships and less likely to break up.

  • And don't AT us with the correlation/causation argument.

  • The researchers specifically noted that this wasn't merely a correlation but that the

  • results demonstrate that method of account management can.. influence relationship quality.”

  • So it's pretty clear that how you handle money actually affects your relationship.

  • There are also hybrid versions of the two.

  • Like theProportional Earnings Approachwhere each partner contributes the same percentage

  • of their income into a joint account.

  • OrBill Parsing”, where each person picks certain bills and expenses to pay for, then

  • use Splitwise or Venmo to split large items like rent.

  • Back to the big question: which is more important?

  • The teamwork or autonomy?

  • We here at Two Cents believe you can have BOTH if you work at it!

  • For example, we got hitched young, while still in college.

  • Truthfully, there wasn't much to pool, so we went the traditional path by default.

  • But over the years, conflicts arose because neither of us had much spending independence.

  • We hear this from couples all the time, and it can really start to build resentment over

  • the years.

  • So our solution was tohave it both ways”: we combined our finances, but we created individual,

  • equally-funded envelopes offun-moneyto spend or save however we saw fit.

  • So I get guilt-free thrift store runs.

  • And I don't need permission to trick out my mountain bike.

  • Boom!

  • Each relationship is unique and there is ultimately noone size fits all”.

  • But if you have decided to share a future together and have healthy levels of trust

  • we encourage you to use your finances as a way to work better as partners, while still

  • protecting individual freedom and independence.

  • And that's our Two Cents!

  • Thanks to our patrons for keeping Two Cents financially healthy.

  • Click the link in the description to become a Two Cents patron!

  • Do you share finances? Why or why not? Share it with us in the comments.

It's a big day!

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B1 US combine autonomy relationship separate shared independence

Should You Combine Finances?

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    Capalu Yang posted on 2020/04/26
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