Shark Tank investor Kevin O'Leary warns couples not to merge finances: "I don't care how in love you are"

Entrepreneur and “Shark Tank” star investor Kevin O'Leary has issued a warning for couples against completely merging their finances. In a Fox interview clip shared on Instagram, O’Leary says he “forbids” couples from giving up their financial identity as it could leave them 'high and dry' if they decide to split in the future. While it seems to be compelling advice from Mr Wonderful, research says otherwise.

Don't be 'a nobody in the system'

O'Leary says when two people get into a relationship, they're often tempted to combine their finances as it signals that they're both committed. However, if they break up in the future joint accounts can be a "knotty mess" to untangle and might leave them 'high and dry' in a credit-driven U.S. economy.

"After you get divorced, if you have been merged in with your significant other, you're a nobody in our system," he says in the Fox News clip, talking about GenZ men and their finances. He goes on to advise people that they need to have their own credit track record and not let emotions get in the way. 

"I don't care how in love you are; you keep your account to yourself," he says. 

O'Leary offered similar advice during a Fox Business interview in March. In an interview with Stuart Varney, he said "50% of marriages" result in divorce over financial stress in the first five years of marriage. Even if couples are in a sure-shot long-term situation, anything such as death could happen. Thus, it is important for everyone to maintain their own financial identity.

He went on to share that he forbids the shared financial practice in his own family as well. He added that he "forces" prenuptial and cohabitation agreements and makes sure that due diligence is performed on significant others as he is "a realist" in the "real world". 

Should couples merge finances? Here's what research says

A 2023 study published in the Journal of Consumer Research found that merging finances in a joint bank account does impact the quality of relationships for engaged or newlywed couples but for the better. The study revealed that couples who merge their finances experience a protective effect that saves them from a decline in relationship quality. 

In the two-year experiment, engaged or newlywed couples were divided into three groups. The first merged their finances, the second kept separate accounts and the third had no intervention. It was observed that couples from the second and third groups experienced the usual decline in relationship quality. 

Whereas, the first group was virtually shielded from the decline due to improved financial harmony, which resulted in less conflict and higher satisfaction with money. Thus, the study suggested that joint accounts can help couples maintain transparency, understand each other's financial priorities, and promote a sense of togetherness. 

However, closing a joint account in the event of a breakup or divorce is messy. In a Forbes report, Wendy Althen, founder and owner of Althen Financial Solutions, also echoed O'Leary's observation that money is the "number one" reason for divorce. She added that conflict can result in a partner emptying the account, or using it as a bargaining chip.