(Daily360.com) – The default when you get married is to combine all of your finances. In some states (community property states), the law even assumes this. However, it’s not a requirement to combine everything, including your money.
What are some reasons why you might consider keeping some or all of your finances separate? More and more younger couples are going for a hybrid arrangement where you might have a joint account as well as separate ones.
One of You Still Owes or Receives Child Support or Alimony
Blended families, stepchildren, etc, can cause complications. If you still owe or receive payments to or from your ex, then it makes sense to keep that money separate so that your spouse does not become liable.
In the case of older stepchildren, one of you may not be contributing towards certain expenses. For example, your stepchild may already have a college fund in the name of one parent.
Keeping your finances separate can make all of this a lot simpler.
You Are Uncomfortable With Financial Dependence
Not everyone finds blending money romantic. Especially if one of you has experienced financial abuse in the past, or witnessed it in their own family, some people may not want a joint account. Or they may want their own, separate account so they know they don’t have to get their partner’s approval for spending.
In other cases, they may not want to be judged.
One of You Has an Inheritance
Any money you inherit is yours, even in community property states, unless and until you put it in an account that is also in your spouse’s name. In the event of a divorce, you may want to make sure that money stays yours.
Or you may be planning on leaving it to somebody other than your spouse, especially for later and second marriages. In this case, keeping it in a separate account can avoid there being any confusion.
One of You Has Substantial Debt
If one of you has substantial debt at the time of marriage, not mingling finances until the debt is paid off can prevent collectors from coming after you if you separate or, worse, your spouse dies.
Also, if your partner is bad with money you may want to keep some separate from them. If somebody in the relationship has a legitimate spending/shopping addiction then they may need money they can’t easily access in much the same way that an alcoholic should not have booze in the house.
You Can Split Expenses More Fairly
Some people prefer to have the spouses contribute to shared expenses in proportion to their income. Having separate accounts as well as the joint one allows you to do this much easier.
You can then keep track of how much equity each partner has. This can also work well for non-traditional relationships and multiple partners.
One or Both of You Are Freelancers or Small Business Owners
Even if it’s only a side hustle, you should create a separate account for the business. Unless your spouse is playing a key role in running the business, there is no reason to commingle this account. In fact, it’s often advisable not to. If your relationship goes south, you don’t want your spouse to drain the operating capital and cost you your livelihood.
It also helps keep track of income better. If both of you have side hustles, then each one needs to have its own account.
While studies show that couples that share money are often happier, keeping at least some finances separate can help you retain autonomy, develop fairness, and protect your own assets. Doing a prenup can help keep finances separate, especially in community property states.
Keeping finances separate does not mean you are “afraid you are going to split up,” it just means you have financial autonomy from your partner and that can sometimes improve your relationship and make you more comfortable. Each couple should do the arrangements that work for them, but if any of these reasons apply, you should consider keeping at least some finances separate.
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