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Should we combine our Checking Accounts?

Mike about Money | Couples checking accounts

Some money thoughts for couples on St. Valentine’s Day

I am asked a lot by couples the best ways to handle expenses. My advice is direct. Do NOT combine checking accounts if you are not married. Don’t even consider it!

After you get married, don’t combine accounts! If you insist on doing as many couple do, only combine accounts after you’ve had a very serious and extensive discussion about finances, present and future, and both of you have a very clear understanding about financial responsibilities, expenses, future plans and purchases, and avoiding debt and saving and investing.

Why do I take such a hard line? It’s very simple. Most people, especially younger people, have very little understanding of how to manage money. Combining the incomes and expenses of two people only multiplies the numbers but it does little to help either party understand how to properly plan and manage their finances.

Don’t move in together before marriage. Many couples justify this move on financial grounds. “We can afford a nicer place if we live together. I’m over here all the time anyway.”

From a moral and religious point of view, it is clear that moving in together is not allowed. I’m not here to pass judgement on anyone but if you ask me for my advice, I will tell you not to do it in the strongest terms.

Why? First of all, the statistics will tell you it’s a bad idea. As reported in The Atlantic, couples who live together before marriage have a 33% higher divorce rate. The council on Contemporary Families, a non-partisan organization, contemporaryfamilies.org, says cohabitation at age 18 ends up in a 60% rate of divorce.

According to statistics gathered by US Attorney Legal Services, usattorneylegalservices.com, shows couples living together before marriage have a 49% chance of being divorced within 5 years. Couples who did not live together only show a 20% chance of divorcing within 5 years.

From a purely financial point of view, living together before marriage is a bad idea. Marriage protects both of you. Unmarried couples have little keeping them together and it’s easy to break up. There is no protection financially for unmarried couples. Misuse of funds is common by one spouse. These couples cannot share benefits, like healthcare. If one person decides to move out suddenly, how does the remaining person afford rent and other bills?

When couples move in together, expenses usually sky rocket. More furniture is needed, food costs, and all of the accompanying household bills that neither may have had before suddenly show up. These couples often comingle checking and share credit cards. Debt piles up quickly. This is not a great way to start a relationship together I can’t say there are no successful couples who lived together before marriage but just want to point out the statistics and realities indicate it is a rare for these couples to last over the long term. Couples break up but bills don’t disappear.

Living together is a major life decision that too many people take too casually. Slow things down. Get to know the financial personality of your sweetheart before making any long term, potentially risky moves to maintain your Fiscal Fitness!​