Could dividing your finances save your relationship?

More and more couples are keeping separate bank accounts—but there are ups and downs (and power struggles) with split finances.

over the course of their six-year relationship, Vanessa Farquharson and her husband, Jacob, have cycled through the key commitment milestones of moving in together, getting married and having a baby boy. But none of these events has changed how they handle their financial affairs: They have their own bank accounts and investments and divide all bills right down the middle, including their mortgage, utilities, property taxes and Internet service. When they go out for dinner, they usually split the tab fifty-fifty, and they take turns filling the car with gas and buying groceries. “We keep track of how much we owe each other, right down to a measly $10,” says Farquharson, a 35-year-old writer from Toronto.

The financial divisions and definitions of “yours, mine and ours” are undergoing a rapid transition as family finances are shifting from the male-dominated model of previous generations to dual-breadwinning couples who typically want to maintain some level of financial independence. It’s hard to believe that until 1961, Canadian women weren’t able to access credit in their own name—and that the existence of couples who h

maintain wholly separate accounts would have been almost unthinkable even 50 years ago. For a younger generation of women whose mothers likely had less financial control or felt they had to secret away pairs of newly purchased shoes in the back of the closet, it’s easy to see why monetary self-reliance has become a priority. And autonomy is particularly appealing for women who are increasingly career-focused, marrying later (if at all) and happy to continue managing their own finances.

A 2014 TD Bank survey found that Millennials (those aged 18 to 34) are more likely to open a joint account for shared expenses before marriage than previous generations—yet, like 42 percent of couples of all ages, many are also hanging on to separate accounts, and the key reason is a desire to maintain independence. A majority of young Canadians keep some degree of financial separation from their partners, and a 2010 RBC study found that most use some combination of joint and separate accounts to manage their money— while only 10 percent share all financial products.

“There’s a pervasive belief that marriage necessitates a blending of everything, but I think keeping separate bank accounts can make for a nice reminder that, actually, we are unique individuals,” says Farquharson, who also believes separate accounts can maintain a little mystique. “I just don’t think my husband needs to be involved in everything I buy. I don’t want to have to ask him or feel guilty if I want to buy an overpriced onesie on Etsy.”

Kim MacDonald, a 36-year-old social worker in Hamilton, Ont., says that she and her husband have joint and separate accounts for just that reason—to avoid arguments about expenses that the other might consider trivial. The couple has been married since April 2012, and they share an account for household expenses, including groceries, but have separate accounts for things like haircuts, hobbies and clothing. “I would be bothered if, for example, I packed my lunch every day and my husband used the money from our joint account to eat lunch out every day,” says MacDonald.

Sociology professor Rachel Margolis, 32, came up with a more sophisticated division of finances.

“I just don’t think my husband needs to be involved in everything I buy. I don’t want to have to ask him or feel guilty if I want to buy an overpriced onesie on Etsy.”

She and her partner—who have been together for six years—both teach at Western University, and when they moved in together, they created a spreadsheet to track payments made by each partner. They now contribute to joint accounts for shared expenses, like the mortgage and utilities, while also maintaining separate accounts and credit. “I think it works because neither of us ever feels like we’re being taken advantage of, and we never feel strange about offering to pay for things because it all evens out,” she says.

Keeping finances separate might even provide a safeguard against conflict. Couples now fight more about money than they do about housework, sex or even snoring—a 2014 Bank of Montreal survey found that Canadian couples are more likely to forgive infidelity than a partner’s financial mismanagement. But research from Jan Pahl, a British sociologist, indicates that when finances are split, women end up taking on a disproportionate amount of family expenses and that expenditures still tend to break down along conventional gender lines. In other words, he pays for the cars and alcohol, and she pays for the kids—even if she makes less money.

Other evidence suggests that commitment can be compromised when love goes Dutch. A 2010 U.S. National Center for Family and Marriage Research study of over 1,000 couples found that married couples who do not pool their income are 145 percent more likely to divorce, compared to couples with just a single shared bank account.

Karin Mizgala, co-founder of Money Coaches Canada, cautions that solo accounts can also lead to secret debt—when it’s your savings account, no one watches the balance dip except you. “Couples who manage money together tend to do it better; it’s much easier to delude yourself when it’s all up to you,” she says. When she and her husband first married, they had trouble sharing finances. “He’s an artist and was much looser with money,” she says. Communication was the key. “It was only after being open and honest about what we wanted that we made it work.”

Harvard University marketing professor and Happy Money co-author Michael Norton posits that couples who pool their finances report greater relationship satisfaction. Norton’s research shows that the more couples combine finances, the happier they are: Couples who share 80 percent are happier than those who share 70 percent, and so on. The effects can be seen even for h

couples who are dating—the more financial commingling the stronger the intention to marry. “It’s a really strong signal that something good is going on if I trust you with my debit card,” he says.

When Heather Livingstone, 32, and her engineer husband married in 2007, they didn’t share finances. “It caused nothing but trouble,” she says, citing different spending styles and dysfunctional communication. “I’m really cheap and will spend hours looking for the best deal. He’s more of a ‘We need this, so let’s just buy it now’ type. I also like to track my spending, and I’m way more likely to mention a purchase before I make it.”

But when Livingstone, who lives in Prince George, B.C., stopped working five years ago to stay home with the first of the couple’s two daughters, things got tricky. “I had to ask my husband for money, which isn’t exactly good for a relationship,” she says. Since 2013, the couple has pooled everything into joint accounts, and Livingstone says that she feels more like they are working toward common goals. “As a stayat- home mom you’re kind of vulnerable, and I felt like I didn’t have the whole financial picture. The money he brings in is my financial future, and it seemed weird to me not to have some knowledge and control. I’m also a bit of a worrier, and now that I can see everything, I realize there’s nothing to worry about.”

Still, financially independent women (and their mates) on the cusp of serious commitment need to think about what can go wrong. Divorce in Canada is on the decline, but approximately 40 percent of marriages will end in that way.

“I want women to believe that they need to have a solid financial foundation of their own,” says Gail Vaz-Oxlade, a thrice-divorced financial consultant. “You cannot be so tied to your partner that you could never find a way to leave, because things happen.” Vaz-Oxlade recommends a joint account for shared expenses but separate savings accounts and no shared credit (other than a mortgage)—but she also points out that the only divorce advantage to having separate accounts is that your significant other won’t be able to empty out your account. “My personal financial independence has always been

“You cannot be so tied to your partner that you could never find a way to leave, because things happen.”

very, very important to me,” says Vaz-Oxlade. “If I want to be a good life partner, that means being able to stand on my own two feet financially.”

Problems can also arise for couples who mostly keep separate finances when one is exceedingly out-earning the other. If both partners contribute an equal amount of money to a joint fund but that contribution amounts to 80 percent of one person’s income and just 30 percent of the other person’s, it can easily lead to resentment because it creates two different standards of living.

Colleen Gauthier, a 36-year-old who works in marketing in Toronto, and her husband keep all accounts separate, with the exception of a joint account for their mortgage. She doesn’t believe that everything has to be shared in order to have a successful marriage—yet she still feels she has additional financial stress because she pays most of the household bills out of her account. “Sometimes, I feel like he doesn’t know how much we’re spending on things,” she says. “I’m the one who worries.”

It isn’t just about keeping track of dollars and cents, of course. Intentions matter. “We often have a belief that if we keep a little for ourselves on the side, then that’s going to give us some freedom,” says Norton. “And there’s nothing wrong with that idea. But if you’re in a relationship and you feel like you need to keep an out, that’s a signal that it’s not really the right relationship.” If you’re not sharing a bank account because it makes sense for tax purposes or because you don’t want to justify every time you go for a pedicure, that’s one thing. If you can’t share a bank account because you’re worried the relationship will break down one tearful night, it’s another thing entirely.

Even as some experts advise caution, many of the women who maintain largely separate finances insist that it has no impact on commitment. “Having children and owning a home together is a pretty huge commitment that is hard to ‘get out of,’ and I don’t think separate finances would make getting out of the relationship any easier,” says Gauthier. Farquharson agrees that a solid relationship is a lot more than shared investments or perfectly compatible spending habits. “Whether or not you have a joint account shouldn’t make or break a relationship,” she says. “I think if your commitment to a romantic partner revolves around money, you’ve got bigger problems to deal with.” n