The Case For Separate Finances

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We’re continuing financial literacy month with a second guest blog post!

Both of our posts this month focus on themes of how we deal with money in partnerships. How we intertwine (or not) or finances in our long-term relationships has significant implications for our personal financial wellness throughout our lifetimes. As such, we want to present new ways of looking at commonly accepted practices in the United States. For example, the author of this post, Purple, is in a long-term partnered relationship but not married, and does not comingle funds with her partner. She outlines the reasons why and discusses the benefits of this intentional decision.

Of course, this is easier to do from the beginning of a relationship. We consider knowing your options and being able to weigh them an important aspect of financial literacy.

Already intertwined? Our other guest post this month discusses ways to protect yourself if you earn less in the relationship. Likewise, this post discusses ways to advocate for yourself financially in a partnership.

Lastly, if you are experiencing financial abuse or know someone who is, reach out for support or offer it where you can. Spaces like the WPF Facebook group are safe havens (as much as places on the internet can be). Ninety nine percent of domestic violence cases include elements of financial abuse. Being aware of your options and being thoughtful in how you set up the financial dynamic in a relationship can be an important piece of creating your long-term security overall.

-Regina, WPF Editor


There are a lot of assumptions built into our society. One is that a woman’s primary purpose in life is to find a partner, marry them and produce children. Since that very much deviates from my intended life path, I’m not down with those assumptions. 

Another assumption is that once you combine your life with this partner, you also share your finances. There is an implication that you don’t trust your partner if you don’t do so. 

I’m not (and will never be) married to my partner, and as a result, I’ve been asked, “Don’t you love him?!” One thing is not required for the other. Loving someone does not mean you need to participate in the institution of marriage, and combining your life with someone else’s does not mean you need to share financial assets. 

My partner and I have been together for 14 years, and I believe that, like everything in a relationship, those in it should make the decision of what’s best for them and their relationship. I like to approach these kinds of discussions as logically as possible and with as many facts as possible.

Financial Abuse

For example, let’s start with stats around one of the worst-case scenarios:

Combining your life with someone else’s is a serious decision and, unfortunately, one that has additional risks for women. I was shocked when I learned how prevalent financial abuse is in our world, and one way of mitigating it is to ensure you always have your own money. 

Marriage & Divorce

If you get married, you’re inherently signing up for a legal and financial partnership with someone else. It’s literally a business agreement with some smooches thrown in. Even if you keep your finances separate within your marriage, your assets are not legally only yours. 

The specifics of marital property rights vary by state but generally include anything acquired during the marriage not explicitly outlined in a prenuptial agreement (if you have one…). Technically, everyone who gets married has a prenup, but it’s the default laws of the state you get married in, which vary wildly across the country. 

But being a financial partnership as well as a romantic one can bring lots of challenges along with it. Financial disagreements are often cited as a leading cause of divorce in the U.S. – and in the U.K., surveys have shown that to be true

A Mixed Solution

Healthy relationships require work, so ideally, you approach problems as partners and work to stay aligned on the same financial goals. I’ve heard that some people accomplish this easily. 

Others create a modified solution, such as always having a little money for yourself in case of an emergency or even a ‘fun money’ account, which I’ve been told can help avoid developing financial resentment for a partner. These accounts include money each partner gets to use without the other one commenting on it….It sounds like mini-uncombined finances, actually…

We Don’t Combine Our Finances

My partner and my finances, of course, started separately by default, and every time a potential benefit came up, we discussed it and decided that combining finances wasn’t worth it for us. We prefer keeping things separate. I’ve done many thought experiments about this, and every time the cons outweigh the pros. My thinking usually goes like this:

  • Would it help decrease our tax bill? No – when I was working, we made almost identical amounts of money, so it wouldn’t help
  • Would it help us manage emergencies and risks? No – we both have emergency funds
  • Would it simplify tracking expenses? Maybe – depending on how you handle personal spending, but it carries that risk of resentment

An Informed Choice

To be honest, I can see myself becoming resentful if we combined finances and I saw my partner spend *our* money on things I don’t value. I believe that I would see the situation as him spending (in some part) my money on something less than optimal – something that holds me back from my goals.

Let’s get into some specific examples, so you know what I’m talking about. While my partner and I agree on 97% of expenses, we are different people that value different things. For example, the things I value most and spend most of my budget on are travel, time with loved ones, food, and new experiences. 

My partner values time with loved ones, video games, and Rubik’s cubes (why do you need four different kinds?!). Physically, he’s a lot bigger than me, so he eats more than me. His food costs are much higher. Just these seemingly small differences have a significant impact on our spending.

Instead of us worrying about what the other is spending, it is a non-issue. I don’t care how he spends his money because it doesn’t affect me. I can’t bother him about buying a fancy keyboard, and he can’t be upset that I spent $7,000 on a plane ticket (yeah, that’s real). We have separate finances, different spending habits, and different FIRE numbers – and that works for us.

How Do We Manage Shared Expenses?

So how do we manage the logistics when we share expenses, such as rent and restaurants? My first love: SPREADSHEETS! For years we’ve been using copies of a Google doc built by a friend in college, tweaking it as needed. 

It lets you input items and easily split them with many people, even in uneven portions (which is helpful when your partner is literally double your size…big men understandably eat a lot). This spreadsheet helped keep the peace within a house of 10 college students that were constantly sharing pizza, and it has kept our post-college shared finances super simple. 

For those of you that use the software You Need A Budget (YNAB), one hack we use to keep this easy is that we list each other in the YNAB app as a 3rd party account similar to a credit card, where you can have a surplus or deficit.

Conclusion

Combining finances with a partner (like all big decisions) should be carefully opted into. When my partner and I have discussed it, we just don’t see a benefit to doing so in our situation. Not combining finances has helped us keep our sanity and save as much as we can without compromising what we value. Discovering that we can skip out on an unquestioned cultural choice has also helped us avoid common relationship pitfalls. 

I hope this was helpful in case you’re considering combining or not combining your finances with a partner. Your decision should not be based on societal pressure or outside forces but on what is best for you.

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