Younger generations have a different approach when it comes to pounds and pence. They’re tech-savvy, worried about the environment, and nearly two-thirds of Gen Zers plan to own their own businesses.
Not only are young people more likely to have a different perspective when it comes to earning and building their brand, but also they may have dramatically different ideas about how to pull their finances together when they’re in a committed relationship or marriage.
So, is what’s mine still really yours when we live under the same roof and contribute to the same living expenses? The answer may depend on how old you are and how long you’ve been in your current relationship.
For a closer look at the answer, Legal & General surveyed more than 1,000 Britons to get their take on shared finances and what may be changing with younger generations.
Where does the money go?
Couples who’d been together the longest, 23 years on average, were likely to have shared accounts for spending and saving money. While one in three couples exclusively shared finances, 91% of couples who were married had joint accounts only.
However, another third of couples (with just 11 years together) kept all their finances separate from their spouse or partner. Couples where both parties kept their finances separate were more likely to report similar earnings than couples with shared accounts.
Among couples with separate accounts, more than half were willing to consider pooling their money, but 15% didn’t want their partner spending the money they earned.
The benefits of shared financial burdens
Couples who’ve been together over a shorter period of time may be less likely to share finances with each other, but for bigger purchases, they may have no choice but to combine their income in some capacity.
Compared to 19% of people aged 40 and older and 21% of people in their 30s, 28% of British homeowners in their 20s said they wouldn’t have been able to afford the cost of their home without the financial support of their partner.
Joint accounts may not be such a bad thing, either. Nearly half of people (45%) reported feeling far less stressed about their finances after combining their accounts with their partner’s. Shared finances can also help with transparency between partners around income, savings and debt.
Compared to less than half of people with joint accounts, roughly two in three couples with separate finances acknowledged not knowing their partner’s credit score. More than half with separate accounts also didn’t know how much money was in their partner’s bank account, or their banking PIN.
More than a third of couples with separate accounts were unsure how much their partner had in either debt or savings, and around a quarter didn’t even know how much money their partner made.
Making money moves
For some couples, the fear of breaking up may hold them back from “going all the way” financially. One in six Britons had a partner leave the relationship and take money out of their joint account, costing £775 on average.
Still, young couples may be able to look towards their love of technology to bridge the gap. More than four in five cohabitating millennials used an app to help manage their finances, which can help reduce the arguments couples have over money, particularly if they have different approaches to saving and spending.
Ultimately, young people have a different relationship with money, and that can include the way they manage money in their personal relationships too. They may not be quick to merge their accounts, but doing so can help establish some of the most important financial aspects any couple will share.
Thankfully, if you disagree on how to manage your money, there might be an app for that.
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