While falling in love and managing a budget don’t always go hand-in-hand, new research shows that it pays to pool finances if you’re seeking a higher level of satisfaction, harmony and commitment in your serious relationship or marriage.
The study from Emily Garbinsky, associate professor of marketing and management communication at the Samuel Curtis Johnson Graduate School of Management, and co-authors shows that this is especially true for low-income couples who combine their bank accounts as opposed to holding separate accounts.
Their paper, “Pooling Finances and Relationship Satisfaction,” has published in the Journal of Personality and Social Psychology.
The researchers drew from classic social psychology’s interdependence theory, which suggests that in order to assess and understand the quality of a couple’s relationship, it is important to consider the unique situation for each interaction, as well as the individual’s needs, thoughts and motives.
“We expected pooled finances to increase one’s level of dependence on their partner,” Garbinsky said, “as well as align the couple’s (financial) interests and goals, things that interdependence theory tells us are associated with high levels of relationship quality.”
They discovered that couples with pooled financial accounts tended to exhibit a better connection and their interactions were more positive, stable and safe. This led to using shared language on publicly available online financial forums to describe their relationships, with pronouns such as “we,” “us” and “our” and fewer pronouns such as “I.” They also used more affiliation words such as “agree,” “connect,” “friend,” “kindness,” “listen,” and “peace.”
In addition, the authors analyzed comprehensive survey data across broad population samples in the U.S., U.K., and Japan. Their findings show a stronger association between pooling finances and relationship satisfaction in the U.S. and U.K., compared to Japan.
“We suspect that the difference in strength is due to the fact that the U.S. and U.K. are individualistic cultures, while Japan is a collectivist culture,” Garbinsky said. “Individualistic cultures tend to focus on the self and an ‘I’ identity, while collectivist cultures focus on group membership and a ‘we’ identity. Because members of collectivist cultures, such as Japan, are already accustomed to focusing on significant others, their relationship may not benefit as strongly from the boost in interdependence as when couples from the U.S. and U.K. pool their finances together.”
Co-authors included Joe Gladstone, assistant professor of marketing at the University of Colorado Boulder Leeds School of Business, and Cassie Mogilner, professor of marketing and behavioral decision making at UCLA’s Anderson School of Management.
“It is our hope that by identifying who is likely to benefit most from pooling finances, and why,” Garbinsky said, “research in this area can help couples both decide how to organize their finances to maximize relationship quality and ultimately improve their well-being.”
Sarah Magnus-Sharpe is director of public relations and communications at the Cornell SC Johnson College of Business.
