For Richer, For Poorer

(Time photo)

Researchers say that couples who combine their finances are happier. [bold added]

deciding to move your money in together can have a big impact on future wealth. Couples who combine bank, credit-card and investing accounts are happier in the long term and find that pooling resources helps clear the path to traditional money milestones such as buying a house and saving for retirement, studies have found.

Married couples hold four times as much wealth as unmarried couples who live together, and researchers point to combining finances as one reason why.

Trust is one of the most important elements in a relationship, but circumstances can also dictate one's financial arrangements. For example, newly-formed older couples who have significant assets may wish to keep them separate for estate purposes, especially if there are children already in the picture.

For the record we owed $thousands in student loans and had negligible assets when we tied the knot, so it was an easy call to start off with joint accounts in everything. (In a community property state like California half of each spouse's income is the property of the other.) It's not clear whether joint finances augmented the balance sheet, but our life has been simpler because of it, and that's worth something in itself.

Final comment: this research may suffer from the basic flaw of survival bias, that is, it looks at existing couples, their financial relationship, their wealth, and their happiness. It doesn't include couples who took the risk of combining their finances and broke up. (Bet they're quite unhappy.) If these couples were included, the conclusions might not be so compelling.