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CNBC
9 hours ago
- Business
- CNBC
This credit card behavior is an under-the-radar risk: 'Be very careful,' expert says
There are all sorts of ways for consumers to misuse credit cards, from failing to pay monthly bills in full to running up your balance. But here's one risky behavior that experts say you likely haven't heard of: "credit cycling." Credit cards come with a spending limit. Cardholders are usually aware of this limit, which represents the overall cap to how much they can borrow. The limit resets with each billing statement when users pay their bill in full and on time. Users who credit-cycle will reach that limit and quickly pay down their balance; this frees up more headroom so consumers can effectively charge beyond their typical allowance. Doing this occasionally is usually not a big deal, experts said. It's akin to driving a few miles per hour over the speed limit — something less likely to get a driver pulled over for speeding, said Ted Rossman, senior industry analyst at But consistently "churning" through available credit comes with risks, Rossman said. For example, card issuers may cancel a user's card and take away their reward points, experts said. This might negatively impact a user's credit score, they said. "If there's even the slightest chance credit cycling can go sideways, it's best not to do it and look for alternatives," said Bruce McClary, senior vice president at the National Foundation for Credit Counseling. "You have to be very careful." The average American's credit card limit was about $34,000 at the end of the second quarter of 2024, according to Experian, one the three major credit bureaus. (This was the limit across all their cards.) The amount varies across generations, and according to factors like income and credit usage, according to Experian. It's understandable why some consumers would want to credit cycle, experts said. More from Personal Finance:Why summer Fridays are increasingly rareHow GOP megabill affects families with kidsWhat a Trump, Powell showdown means for your money Certain consumers may have a relatively low credit limit, and credit cycling might help them pay for a big-ticket purchase like a home repair, wedding or a costly vacation, experts said. Others may do it to accelerate the rewards and points they get for making purchases, they said. But card issuers would likely see repeat offenders as a red flag, Rossman said. Maxing out a card frequently may run afoul of certain terms and conditions, or signal that a user is experiencing financial difficulty and struggling to stay within their budget, he said. Issuers may also view it as a potential sign of illegal activity like money laundering, he said. "You could be putting yourself at risk by appearing to be a risk in that way," McClary said. If a card issuer penalizes a credit-cycling customer by closing their account, it could have negative repercussions for their credit score, experts said. Credit utilization is the share of one's outstanding debt relative to their credit limit. Keeping utilization relatively low generally helps boost one's credit score, while a high rate generally hurts it, McClary said. Experts generally recommend keeping credit utilization below 30%, and below 10% if you really want to improve your credit score. A canceled card would reduce one's overall credit limit, raising the odds that a user's credit utilization rate would increase if they have outstanding debt on other credit cards, McClary said. Further, a card company could flag misuse as a reason for the account closure, potentially making the user look like more of a risk to future creditors, he added. Consistently butting up against one's credit limit also increases the chances of accidentally breaching that threshold, McClary said. Doing so could lead creditors to charge over-limit fees or raise a user's interest rate, he said. Consumers who credit-cycle should be cognizant of any recurring monthly subscriptions or other charges that might inadvertently push them over the limit, he said. Instead of credit cycling, consumers may be better served by asking their card issuer for a higher credit limit, opening a new credit card account or spreading payments over more than one card, Rossman said. As a general practice, Rossman is a "big fan" of paying down one's credit card bill early, such as in the middle of the billing cycle instead of waiting for the end. (To be clear, this isn't the same as credit cycling, since consumers wouldn't be paying down their balance early in order to spend beyond their allotted credit.) This can reduce a consumer's credit utilization rate — and boost one's credit score — since card balances are generally only reported to the credit bureaus at the end of the monthly billing cycle, he said. "It can be a good way to improve your score, especially if you use your card a lot," he said.
Yahoo
a day ago
- Health
- Yahoo
The Surprising Secrets Married Couples Keep From Each Other
In the storied dance of matrimony, many believe that honesty is the best policy. However, as any seasoned couple will tell you, some secrets might just be the glue that holds everything together. From unspoken indulgences to hidden fears, it turns out there's more beneath the surface of "I do" than meets the eye. Dive into this revealing exploration of the unexpected secrets even the happiest couples maintain, and perhaps find a glimmer of understanding-or mischief-of your own. In the realm of marriage, health is often a deeply personal affair that gets entangled with shared life. Quietly, many partners tuck away their health worries, choosing to deal with them alone. The reasons for this secrecy range from not wanting to worry the other to fearing loss of attraction. The silence can become a haven for anxiety, yet many choose to bear it alone, thinking their partner will remain blissfully unaware. This secret not only shelters vulnerability but also speaks volumes about trust and intimacy. Hiding health concerns can create an invisible wall that subtly shifts the dynamic between partners. It's an unspoken decision to shoulder the burden, either out of love or self-preservation. For some, it might even be a way to maintain control over a part of their life, especially if other areas feel shared or exposed. This secret carries a paradoxical weight, at once isolating and protective. Despite the underlying trust issues, couples often continue to function seamlessly, proving the resilience of marital bonds. In a world where "retail therapy" exists, it's no surprise that hidden shopping sprees are at the top of the secret list. Many partners confess to keeping their spending habits under wraps, casually omitting the details of their latest splurge. A study by found that 12 million Americans have a secret credit card or bank account from their partner. This financial infidelity can stem from a desire for independence or simply the thrill of a clandestine purchase. Surprisingly, these hidden expenses often remain undiscovered, blending seamlessly into the fabric of shared finances. What makes this secret intriguing is its potential to go unnoticed for years, sometimes even decades. Couples might be splitting bills while one partner enjoys the occasional covert indulgence. For some, this secret spending is less about deception and more about maintaining a sense of self in a shared life. The allure of a secret purchase can be intoxicating, offering a temporary escape from the routine confines of married life. In a marriage where transparency is touted as sacred, this hidden habit sparkles with quiet rebellion. Navigating relationships with in-laws can be as delicate as performing a duet on a tightrope. Many married individuals keep their candid opinions about their spouse's family tucked away, preferring peace over potential discord. Research from the University of Michigan suggests that close ties between in-laws and couples can reduce conflict but may also suppress honest opinions. The dichotomy is clear: fostering harmony often comes at the expense of personal truth. This secret, like a well-kept heirloom, is passed down through the generations of married life. The intricacies of family dynamics often make this a secret worth keeping. Voicing true feelings about in-laws can ripple out, affecting familial relationships and the marriage itself. Instead, many choose silence, opting for a façade of geniality that ensures family gatherings remain civil. The art of balancing genuine emotions with familial expectations becomes a performance in itself. This silent diplomacy, while exhausting, is a testament to the lengths couples will go to preserve the greater peace. Hidden behind the veil of routine and daily life, fantasies—whether mundane or wild—often remain unspoken. In the safety of their minds, many partners explore desires that might surprise even their closest confidants. These fantasies can range from the innocently romantic to the thrillingly adventurous, offering a mental escape from the everyday. The private world of unshared dreams is a garden where creativity and curiosity flourish unchecked. This space, though secret, is integral to the personal growth and satisfaction of an individual within a marriage. The decision to keep fantasies secret can stem from a fear of judgment or simply the desire to preserve a personal sanctuary. Sharing every whim might dilute their magic or, worse, open the door to misunderstandings. The allure of a private fantasy lies in its untouched nature, a place where reality doesn't have to intrude. However, this secrecy is not always a barrier; it can become a bridge, enhancing the allure of the person keeping it. The complexity of concealed fantasies is a testament to the multifaceted nature of love and attraction within marriage. It's not uncommon for partners to harbor secret regrets about choices made along the journey of life—choices that got them to where they are now. According to a study by Cornell University, regrets about education, career, and romance are the most common and can significantly affect one's psychological well-being. These regrets might not necessarily pertain to the marriage itself but to roads not taken or opportunities missed. Keeping such reflections hidden can stem from a desire to protect their partner from guilt or discomfort. The silence surrounding these regrets is often composed of layers of love, fear, and self-preservation. Navigating life with the weight of unspoken regrets can be a solitary journey within a partnership. This secret becomes a personal meditation on "what could have been," often juxtaposed with gratitude for what is. Partners might choose silence to shield their relationship from the corrosive nature of doubt and dissatisfaction. Every so often, these regrets surface in quiet moments, reframing the present with what-ifs and maybes. Yet, the decision to keep them secret underscores the complexity of balancing personal history with shared futures. In the tapestry of marriage, individuality is a thread that weaves in unexpected colors and patterns. Private hobbies and interests often remain undisclosed, quietly enriching the lives of those who cherish them. Whether it's a penchant for late-night poetry writing or a secret love for painting miniatures, these pursuits offer a private escape. The decision to keep them hidden might stem from a fear of judgment or simply a desire to maintain a piece of the self untouched by marital expectations. These secrets, while seemingly trivial, can be profoundly significant for personal fulfillment. The allure of a private hobby lies in its ability to nurture without the need for validation or approval. It becomes a sanctuary, where personal growth and satisfaction flourish in solitude. Some partners cherish these hidden interests as a way to maintain a sense of independence within a shared life. The quiet joy derived from these activities often spills over, subtly enhancing the relationship in unexpected ways. In the end, these secret passions are a testament to the resilience of individuality within the intricate dance of marriage. In the complex ballet of balancing personal and shared ambitions, career dreams often fade into the shadows, unspoken and secret. Dr. Alexandra Solomon, a clinical psychologist and professor at Northwestern University, notes that many individuals suppress career aspirations for the perceived greater good of the relationship. The reasons for keeping these ambitions secret range from fearing they might disrupt the status quo to worrying about their partner's reaction. These shelved dreams can simmer beneath the surface like a quiet undercurrent, influencing decisions and attitudes within the marriage. The tension between personal ambition and marital harmony is a delicate dance that many navigate in silence. The choice to conceal these ambitions can stem from a desire to avoid conflict or not appear ungrateful for the life shared. Over time, the secrecy can create a bittersweet undertone, where dreams are cherished yet unfulfilled. The narrative of a life lived for someone else's aspirations can become a silent refrain. Yet, this hidden yearning also speaks to the complexities of love and compromise that marriage entails. The decision to keep these ambitions secret reflects a nuanced understanding of partnership, where love sometimes demands silence. Raising children is often seen as a shared journey, yet many parents harbor concerns they never voice to their partner. These anxieties might stem from differing parenting philosophies or worries about the child's future. The decision to keep these concerns secret can arise from not wanting to undermine the other's confidence or ignite unnecessary conflict. The silent fretting becomes a personal vigil, where one watches and waits, hoping for reassurance without asking for it. This unspoken dialogue, while isolating, is a testament to the complexities of shared parenting. The weight of these concerns can shape interactions and decisions in subtle ways. Partners might adjust their behavior or make choices based on these secret worries, often without the other's knowledge. There is a strange comfort in keeping these thoughts private, as it allows for a quiet space to consider and reflect. Over time, this secret can create an invisible bond of understanding and empathy between partners. In the intricate world of parenting, unvoiced fears and hopes often speak louder than words. Personal growth is a journey that often doesn't fit neatly into the narrative of married life. Many partners embark on paths of self-discovery that remain undisclosed, nurturing growth that goes unnoticed. This can include anything from spiritual exploration to learning new skills or embracing new philosophies. Keeping this journey secret can stem from a desire for personal space or fear that the change might disrupt the relationship's equilibrium. This quiet evolution speaks to the resilience of individuality even within the most intertwined unions. The decision to keep personal growth secret can also reflect a desire to maintain a balance between independence and interdependence. Each step forward in secret becomes a private triumph, a testament to the human capacity for reinvention. This concealed development can, however, create a ripple effect, subtly influencing the dynamics of the relationship. Partners may find themselves shifting in response to unspoken changes, adapting to new rhythms without quite realizing why. In marriage, sometimes the most profound transformations are the ones that happen quietly, beneath the surface. The passage of time is an inescapable truth, yet many couples choose to keep their anxieties about aging to themselves. Concerns about physical appearance, health, and the inevitability of change often remain locked away. The decision to stay silent can stem from not wanting to appear vain or burden the other with worries about the future. This secret reflects the delicate dance between self-perception and how one is perceived by their partner. It underscores a universal truth: the fear of aging is a deeply personal journey. As partners navigate their timelines, these hidden stressors can quietly influence interactions and decisions. The silence becomes a shield, protecting vulnerability while allowing room for introspection. Over time, this unspoken tension can create an unacknowledged bond, where mutual understanding flourishes in the absence of words. The shared silence becomes a testament to the complexities of love, where some truths are understood without ever being spoken. In the intimate world of marriage, the fear of aging is a secret many choose to keep, whispering in the background. Jealousy, that age-old specter, often lurks in the shadows of even the most harmonious marriages. Many partners, despite their best efforts, harbor secret envies that they prefer to keep hidden. Whether it's about the other's success, friendships, or even attention from others, these feelings are often shrouded in silence. Keeping such emotions secret can stem from not wanting to appear insecure or disrupt the relationship's delicate balance. In the intricate dance of marriage, the silence around jealousy is a poignant reflection of love and vulnerability. These concealed envies can color interactions in subtle ways, influencing both behavior and perception. Partners might find themselves compensating for these feelings through actions that attempt to restore equilibrium. The secrecy creates a private arena where one grapples with emotions that speak to the core of human nature. In marriage, the silent acknowledgement of jealousy becomes a testament to the complexity of love, where the fear of loss is ever-present. The decision to keep these feelings hidden reflects a deep desire to protect the relationship from the corrosive potential of envy. Even in the most steadfast marriages, doubts about the relationship can linger in the shadows, unspoken and unseen. These reservations might crop up during challenging times or as part of natural introspection. Keeping such doubts secret can arise from not wanting to hurt the other or appear uncommitted. This silence becomes a protective mechanism, safeguarding the relationship from the potential fallout of vulnerability. Yet, it also speaks to the resilience of hope, where choosing to stay silent is an act of faith in the partnership. The decision to conceal these doubts creates a private dialogue, a quiet reflection on the nature of love and commitment. It becomes a personal exploration of what it means to be with someone for the long haul, through ups and downs. While these secrets might appear as cracks, they can also be seen as spaces for growth and understanding. The choice to keep them hidden reflects an intricate dance between fear and trust, where silence becomes an act of love. In marriage, sometimes the most profound conversations are the ones that happen quietly, within one's own heart. The future, with its vast uncertainty, often harbors fears that remain unacknowledged even within the closest marriages. Partners might worry about financial stability, health, or the unknowns that lie ahead, choosing to keep these apprehensions private. The decision to stay silent can stem from not wanting to burden the other with what-ifs or disrupt the present moment. This secret becomes a quiet meditation on the nature of time and the unpredictability of life. It underscores a universal truth: the future is a deeply personal journey, even when shared. As partners navigate their paths, these hidden fears can subtly influence decisions and priorities. The silence becomes a space for reflection, allowing room for personal growth within the safety of the relationship. Over time, this unspoken tension can create an unacknowledged bond where mutual understanding flourishes without the need for words. In the intimate world of marriage, the fear of the future becomes a quiet companion, whispering reminders of life's impermanence. The decision to keep these fears hidden reflects a delicate balance between hope and reality, where love finds its footing in the unknown.
Yahoo
01-04-2025
- Business
- Yahoo
The fine print: What you need to know about financing DoorDash orders through Klarna
Before you use Klarna to finance that DoorDash delivery, did you read the fine print? The popular food delivery app announced its partnership March 20 with commerce platform Klarna in a news release. The goal of the partnership between the two platforms is to give consumers "more ways to pay for groceries, retail, meals and more," the release reads. Klarna provides alternative payment schedules, such as pay-in-four and "buy now, pay later" options, to finance everything from cheeseburgers to designer purses. 'Our partnership with DoorDash marks an important milestone in Klarna's expansion into everyday spending categories. By offering smarter, more flexible payment solutions for groceries, takeout, and retail essentials, we're making convenience even more accessible for millions of Americans.' Fiscal responsibility: These New York areas rank among the best in the U.S. for smart money management According to a recent survey, out of 1,275 Americans who placed an order using DoorDash, 1 in 5 of those customers used Klarna to pay for at least one of their recent purchases when available. The survey also found that most respondents were using Klarna to pay primarily for takeout and groceries purchased through DoorDash. The majority of Klarna customers on DoorDash had credit card debt and lived paycheck-to-paycheck. Other findings from the survey include: 20% of recent DoorDash customers used Klarna, and 64% say they might in the future 23% of customers who opted for Klarna said it was because they "couldn't afford the total cost," and 22% of customers chose Klarna because any credit cards they had were "maxed out." Customers who were Gen Z were the most frequent users of Klarna on DoorDash. Customers will see Klarna as a new payment option when checking out from DoorDash, with the following options for payment: Pay in Full allows for customers to pay the full amount immediately using Klarna's payments platform. "Pay in 4" prompts customers to pay in "four equal interest-free installments." Pay Later gives customers the option to defer payments to a more convenient time, "such as a date that aligns with their paycheck schedules." Klarna's website also lists an option to "split any purchase at DoorDash" using a "secure, instantly created, single-use virtual card." Only customers aged 18 or older can use Klarna. In 2024, New York governor Kathy Hochul introduced proposed regulatory measures for "Buy Now Pay Later" lenders (such as Klarna) in the state budget. The measures would require such companies to obtain a license to operate in the state. The proposed regulations would also allow for New York to "limit late fees, force companies to report to credit bureaus and implement other fraud protections, much like those already required in the credit card industry," reporter Jon Campbell wrote for the Gothamist in 2024. A current version of the proposed regulations exist as Assembly Bill A6757. The bill was referred to the Assembly Banks committee on March 11. If you miss a Klarna installment, there are consequences. "If your payment is not registered by the last reminder due date, the debt is transferred to debt collection," the Klarna website says. If you can't pay on time, you do have the option to extend your due date once per the length of that particular order. Klarna's website explains that the company will email a customer if a payment is unsuccessful. "We'll also try one more time to collect it," an FAQ page reads. "If we can't collect it a second time, it will be added to your next payment along with a late fee of up to $7.00. The aggregate sum of your late fees will never exceed 25% of your order value at the time of purchase." According to John Egan, a personal finance expert for opting to use Klarna for DoorDash purchases is OK "as long as you pay them off as soon as possible." There's also the matter of accruing interest. "If you don't pay off these purchases during Klarna's interest-free period," Egan continues in a blog post for "then the DoorDash-ordered pepperoni pizza you bought with Klarna could cause some financial heartburn in the form of interest charges." This article originally appeared on Rockland/Westchester Journal News: DoorDash Klarna financing: What New Yorkers need to know
Reuters
18-02-2025
- Business
- Reuters
US consumers rush to buy as Trump tariffs fuel stockpiling, report finds
Feb 18 (Reuters) - One in five Americans have said they are purchasing more items than usual primarily due to concerns over President Donald Trump's tariffs, a report, opens new tab showed on Tuesday, reflecting heightened consumer anxiety over potential price hikes and economic uncertainty. Tariffs tend to be inflationary because they raise the cost of imported goods, prompting businesses to either absorb the higher expenses or pass them on to consumers through price increases. It can lead to broader inflationary pressures as production costs rise across industries that rely on foreign materials and components. For consumers, the fear of rising prices often fuels stockpiling behavior, particularly of non-perishable food, toilet paper and medical supplies, as they rush to buy goods before costs escalate further. When asked about the impact of Trump's planned tariffs on large purchases, 22% respondents said they had a significant impact, while 30% reported some impact, according to the report. Wall Street is anxious tariffs may accelerate U.S. inflation, prevent the Federal Reserve from cutting interest rates and slow economic growth as uncertainty surrounding trade policies can also weigh on consumer confidence. One in five Americans have characterized their recent purchases as 'doom spending', and 23% Americans expect they can go into or worsen their credit card this year, the report said. Doom spending refers to the behavior of making excessive or impulsive purchases due to uncertainty or anxiety about the future, often triggered by economic instability, geopolitical tensions or worries over looming financial concerns. Company executives have described to Reuters and on conference calls the challenges of an environment made more uncertain by Trump's shifting plans for tariffs that could upend world trade and prompt some firms to move production to the United States.
Observer
10-02-2025
- Business
- Observer
Mixing love and money: Good for your finances and relationship
When Nia Darville Stokes-Hicks and Armondi Stokes-Hicks married two years ago, they set up five bank accounts. Each had an individual bank account for personal spending, and they shared a checking account for paying household bills. They had a joint savings account and yet another account for money they set aside to use together. They weren't unusual — 34% of couples have a mix of accounts, and 23% keep their finances entirely separate, according to a YouGov poll conducted three years ago for With American couples marrying later in life, according to the Census Bureau, maintaining separate accounts has become more common than it once was. By the time most people reach their late 20s and early 30s, they've been working for six or more years, have set up their own checking and savings accounts, have established personal credit, and might even own a home or a brokerage account. Often people want to maintain their financial independence after marriage, but experts say this isn't necessarily a good idea, especially if you're thinking about long-term goals such as saving for retirement. 'Gone are the days when couples get married right out of school and open up their first bank account together and learn together how to manage money,' said Bill Nelson, founder of Pacesetter Planning in Arlington, Virginia. Having separate accounts made it more difficult to see the household's total financial picture, said Stokes-Hicks, 28, a former Netflix writers' production assistant who works as a Starbucks supervisor and lives in Jefferson County, Colorado. He and his wife agreed to simplify their finances last year when they realized they weren't using their bank accounts — they were spending with their credit cards and paying them off using the household bills account. Now they share three accounts: a high-yield savings account, a checking account for household bills, and another savings account. Both are enrolled in employer-sponsored retirement plans. 'I feel like it's a lot easier to hit your financial goals when you're all working in the same direction and you both have all of the information,' said Darville Stokes-Hicks, 27, who works as a diversity, equity, and inclusion director. Although nearly 1 in 3 people in a 2024 survey by WalletHub said they believed that sharing a financial account led to increased conflict, research finds the opposite is true. A recent study in The Journal of Consumer Research found that couples with joint accounts tended to be happier and more committed than those without. Merging accounts helps align a couple's financial goals and encourages them to create a tighter bond as they work to save for a house or retirement, the research showed. 'Joint accounts almost force you to have those conversations and get on the same team,' said Jenny G. Olson, one of the study's authors and an assistant professor of marketing at Indiana University. She acknowledges, however, that there are instances when a joint account could be problematic — for example, in relationships where there is domestic violence. Most couples should consider setting up a joint account because it allows them to make informed decisions and create a 'we' perspective, Olson said. Separate accounts could lead to misaligned financial goals. Couples who keep their finances separate can still work toward shared financial goals, provided they exchange information. 'I think no matter what financial agreement you make, as long as you're transparent about it and the other person feels as though they are being included in the knowledge, you're going to have the beginning of a successful relationship,' said Kathryn Smerling, a family therapist in New York City. Carlyle and Shawn Button lived together for a few years before marrying five years ago. After they wed, they didn't combine their accounts, but each added the other as an authorized user for emergencies. 'I think it happened to come from a place of us having individual finances as adults before we lived together,' said Shawn Button, 32, a head chef and kitchen manager at a brewery in Henderson County, North Carolina. Carlyle Button, 30, pays utility, internet,t and phone bills, while Shawn Button takes care of their car payment and car insurance and regularly deposits money into a savings account for large joint purchases, like their new car. They take turns paying for groceries. Each pays for preferred streaming and subscription services. The only bill they split evenly is their rent. 'I take the heavier weight of bills because Shawn manages our savings account,' said Carlyle Button, who works as a bartender at a different brewery in Henderson County. 'I'm not necessarily great about thinking about savings as a bill itself, and he is.' Although the Buttons keep their accounts separate, they file taxes jointly. They also discuss financial goals, like saving for the car. He contributes to a retirement account, and she is enrolled in an employer-sponsored retirement plan. The couple don't discuss their purchases for themselves, however. If the bills are paid and money is being saved, each person is empowered to buy whatever the individual wants with his or her own paycheck, Button said. After someone has been financially independent, it can be difficult to suddenly have to ask a spouse for permission to spend money. If a couple want to retain some financial independence, Brandon Welch, a financial adviser with Newport Wealth Advisors in San Diego, recommends this approach: Set up a joint account for household expenses and then base contributions on each person's total income. The couple should also agree on joint goals, such as saving for retirement, a house, or a college fund for children. Whatever money is left over can go into each person's separate accounts to spend however the individual chooses, he said. Mistakes and Solutions Regardless of whether a couple combines accounts or keeps them completely separate, the key is for each spouse to be fully transparent. 'You should have a way, as a couple, to see the entirety of your family's financial snapshot at any one point in time,' said Nelson of Pacesetter Planning. Couples can create spreadsheets tracking income and outflow or use budgeting software. Couples with separate finances who don't discuss income and savings risk undermining their long-term financial goals. For instance, when one partner pays significantly more household expenses relative to the individual's income, it can hinder the couple's ability to save for retirement, said Michael Carbone, a financial adviser with Eppolito Financial Strategies in Chelmsford, Massachusetts. In households where couples have disparate incomes, it's not uncommon for the higher earner to contribute the maximum amount to retirement savings, while the lower earner struggles to do that — typically because he or she is allocating too much income to bills, Carbone said. By viewing household finances holistically, couples can split bills fairly and maximize both spouses' retirement savings, particularly if the higher earner covers more of their shared expenses. Not only would the couple save more for retirement, but they would reduce their taxable income. 'I think a lot of people underestimate the power of tax-deferred accounts,' Carbone said. Another potential mistake that couples make when they maintain separate accounts is to duplicate emergency funds, tying up cash that would be better invested or saved. 'If each person is doing it separately, then they can end up having double what they need set aside in cash,' said Justin Pritchard, founder of Approach Financial in Montrose, Colorado. That money might be better used paying off debt, making a maximum contribution to a 401(k) plan, or opening a tax-deferred health savings account, he said. Keeping separate finances can mask potential economic vulnerabilities and give couples a false sense of their overall financial situation. 'If one partner is struggling and the other partner is doing well, then the one who's doing well might think everything is peachy keen, but the other person is barely making it or taking on debt, even,' Pritchard said. It can also give the partner who makes less income the wrong impression that the couple are struggling. As a bartender, Carlyle Button relies on tips and often makes less income in the winter, her husband said. When her salary dips, he pays a larger portion of the bills. 'You have to trust your partner,' Carlyle Button said, 'to know that they're going to carry a level of responsibility like you.' This article originally appeared in
