Joint Versus Separate Bank Accounts

checkbook07They say that one of the biggest things that couples fight about is money so even before we got married, we talked about how we would handle our finances.  We could either have one joint account, two separate accounts, or a combination of both joint and separate accounts.  We ended up agreeing on the third option.  We felt that this was the most fair way.  It allowed us to put a set amount into our joint account that would go towards all shared expenses like mortgage, utilities, groceries, etc. while also allowing us to have our separate accounts for discretionary spending.

The first part was agreeing how much to put into the joint account.  First you have to decide if you will both be putting the same amount of money or the same percentage into the joint account.  A lot of this will depend on how much each of you make.  Of course if you both make around the same amount of money then putting in the same set amount for each person makes sense.  But what if one person makes a lot more money than the other?  In that case, putting in the same percentage could make more sense.  In a way you are contributing an equal percentage but the person that makes more will be putting in more money as well.  And at the same time, the person who makes more also has more money in their separate account to spend as they wish too.The other part to consider when deciding how much to put into the joint account is your budget.  You’ll need to make sure that you are putting in enough money to cover all of your monthly joint expenses.

So all expenses in the joint account must be agreed upon by both parties.  This works out great for us as we find we argue less about how to spend our money.  If I want to spend $200 on a new purse or pair of shoes, I don’t need to get his approval.  I can just use my own separate account to pay for it.  And that way I won’t be upset if he decides to make a sports bet because I don’t have to know about it since he uses his own account.  It’s also more romantic when we get each other birthday or anniversary gifts…it doesn’t seem like we are just using the joint account to buy gifts for ourselves and can still be a nice surprise.

Joint Accounts

  • Pros – more convenient and easier to balance your checkbook, if one spouse passes away then the other spouse doesn’t need to go to probate court to get the money, creates more financial unity in considering money as “ours” instead of “mine” and “yours”
  • Cons – if you end up separating or getting divorced then one spouse can close the account and get all the money regardless of who made more deposits into the account, might feel less independent as you might always need to get your spouses approval for any spending

Separate Accounts

  • Pros – can be more financially independent, good for couples that have a disparity in debt before the marriage, if the relationship is rocky and divorce is a possibility then it’s easier to separate finances afterwards, book keeping responsibilities are shared by both parties instead of one person managing a joint account, ability to have privacy about what each person spends money on
  • Cons – will need to decide how to split joint expenses, might argue more about how to spend money on big purchases together since both are so used to being independent, if one spouse passes away then the other spouse would not have access to the other account unless a will is made beforehand

Both Joint and Separate Accounts

  • Pros – will have the advantages of both with being able to maintain some financial independence while having the convenience of a shared account for joint expenses
  • Cons – it’s more work to maintain both a separate and joint account, you will need to communicate and agree upon who will pay bills from the joint account

In the end there is no right or wrong way to handle finances.  It just comes down to what works best for each couple.

Do you have a joint banking account, separate banking accounts, or both?  What were your reasons for handling your finances that way?

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One comment

  1. Sheila K. says:

    We only have one joint account. It’s just easier for us since everything is in one place. Of course my husband makes a lot more money than I do so that makes it better for me =P

    Plus I feel that if you are married, it makes more sense to share everything. It forces us to talk about money matters and agree on our shared financial values.

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