Joint bank accounts can help couples curb frivolous spending

A new study indicates pooling money with your partner can save you hundreds of dollars

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

Joint bank accounts can help couples curb frivolous spending

If you’re in a committed relationship and are living together on a budget, you may want to think twice about maintaining separate bank accounts. 

A new study published in the Journal of Consumer Psychology suggests pooling your money into a joint account could nudge both of you into spending more responsibly. 

The study found that couples who tuck all or most of their money into a joint account tend to spend less money on hedonistic purchases – such as a last-minute spa trip, a $15 cocktail or a luxury overnight stay. Instead, partners are more likely to use their funds for practical purchases they can justify to their better halves. 

Partners who maintain separate accounts, by contrast, tend to feel less guilty about splurging on purchases that feel good, but don’t really have a practical purpose. They also appear to feel freer to spend their money on whatever they desire – even if it’s costly.

See related: Poll: No end in sight for 2 out of 3 adults with debt 

Couples with one bank account spend more responsibly, ask permission 

According to study co-author Emily Garbinsky, the impact a joint bank account has on a partner’s desire to spend freely is so strong that a joint account could cause couples to save hundreds of extra dollars. 

“We found that this spending pattern was not a one-time occurrence,” said Garbinsky in a news release. “People made these decisions over and over again, which resulted in thousands of dollars spent.” 

The powerful effect a joint account can have on a couple’s desire to spend appears to be due, in part, to partners’ guilt about their spending. 

Garbinsky said couples who maintain joint bank accounts often spend more responsibly because they feel as if they have to ask permission from their partners to spend their joint funds on something frivolous. For some people, just knowing their partner may see what they purchased and how much they spent is enough to turn them off of buying something decadent. 

Partners who shift their spending to more responsible purchases may also be actively avoiding arguments over money. 

In a May 2018 talk at Yale, Garbinsky noted that avoiding conflict can be a powerful motivator for people – particularly since money is often a hot button issue for couples who live together. 

“Being able to justify our actions allows people to avoid conflicts, which is important given the fact that money is such a pervasive source of conflict in relationships,” said Garbinsky in the talk. 

Money that is set aside for a joint purpose may also prompt some people to think more about their partner, she says – even if they’re just buying something for themselves. That, too, can discourage people from spending their joint funds more freely. 

See related: Tips for maximizing rewards in 2019 with a January spending reset

"Being able to justify our actions allows people to avoid conflicts, which is important given the fact that money is such a pervasive source of conflict in relationships."

A useful budgeting tool

If you’re considering merging finances with a partner – or keeping them separate – you may feel turned off by the idea of allowing your partner’s opinion of a purchase affect how you spend money that you earned. 

But if the two of you are living on a tight budget, it’s worth considering how you both could benefit from the extra oversight – even if it’s annoying to pass up purchases you love, but don’t really need, simply because you know your partner might judge them.

The effect is similar to having an accountability partner to help you meet your goals. Knowing that your partner might see you overspending could be just what you need to say no to temptations that are otherwise hard to resist. 

“Intuitively, people tend to think that there are advantages to keeping money separate because it allows freedom to spend money without feeling guilty,” Garbinsky said in the news release. “But we are living in an era when 50 percent of Americans are living paycheck to paycheck.” 

That’s not to say you should give up frivolous spending completely, she says. Fun but impractical purchases can be good for you – in moderation. They not only feel good in the moment; they can also boost your mood. 

If you want more privacy with your fun money, you and your better half may want to consider a compromise instead: Move most of your money into joint accounts and maintain separate accounts for a small-but-meaningful stash that you are both free to spend however you please.   


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Updated: 03-19-2019