For Couples, Sharing Money Offers Financial and Emotional Gains

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WSJ Your Money Briefing 8 min 3 speakers 2 chapters transcribed 2 months ago
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Daniella Cheslow 0:30
Here's your money briefing for Thursday, December 8th. I'm Daniela Cheslow for The Wall Street Journal, filling in for J.R. Whelan. Do you live with a boyfriend, a girlfriend, a spouse? You may share a couch, but if you're not sharing finances, on average, you're probably missing out.
Julia Carpenter 0:53
When you are sharing money with a partner and your money is all in one pot, you're then you are thinking more about what that money is being used for, whether it's being saved for a down payment or being saved for retirement or saved for education, some common goal that your money, our money in that case, is going toward.
Daniella Cheslow 1:11
On today's show, our personal finance reporter, Julia Carpenter, will explain why couples who combine their bank, credit card, investment accounts tend to not only be wealthier, but also happier in the long term than those who don't. That's all after the break.
Daniella Cheslow 1:35
Unmarried couples who live together share a home and bills and expenses, but there's a financial gulf that separates them from married couples. And it turns out a major factor is combining their money. But despite the financial benefits of pooling resources, it's a step that some couples aren't willing to take. Wall Street Journal personal finance reporter Julia Carpenter has been looking into the benefits and the boondoggles of couples pooling together their finances, and she's here now to talk about it. Hi, Julia. Hi, Daniela. Thank you for having me. Can you explain why pooling money gives couples such an edge over those who don't?
Julia Carpenter 2:13
I've looked at a lot of studies that show that married people have this wealth advantage over unmarried people, both unmarried couples who live together and unmarried single people. In one study from the Federal Reserve of St. Louis, married couples hold four times the wealth of unmarried couples who live together.

How does pooling money explain the wealth gap between married and unmarried couples?

Julia Carpenter 2:32
That was surprising to me because unmarried couples who live together in many ways are very similar to married couples. But it seems that some of the things that are differentiating these sets of people are housing wealth, which we know has only gotten more expensive in this country to own a home and purchase a home, and combining finances. That once you start pooling your money with another person, you're able to then grow wealth.
Daniella Cheslow 2:55
How does that work in the day to day? What kind of decisions are people making differently when they have a joint account?
Julia Carpenter 3:01
it seems that one of the big things combining money does is it makes you think about goals more. So when you are sharing money with a partner and your money is all in one pot, then you are thinking more about what that money is being used for, whether it's being saved for a down payment or being saved for retirement or saved for education, some common goal that your money, our money in that case, is going toward. One of the games that the researchers played with people that I thought was really illuminating is they were looking at why people feel more accountable for their money when they share it, why you're less likely to make a frivolous purchase or a silly purchase when you share money with someone.
Julia Carpenter 3:40
And what they were offering these people in this study as an option was you could either buy this coffee mug, which was coded as sort of the utilitarian, sensible, reasonable option, or this beer tankard. Hold on, what's a beer tankard? Oh, a beer tankard, like if you go to a beer house or a beer hall, they have those like giant frosty mugs of beer that they bring out to you.

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