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Should Couples Keep Joint Or Separate Bank Accounts?

 

 

Hello February…the month that prompts us to reminisce about LOVE. So what’s more romantic than talking about whether or not couples should merge their bank accounts together! (Sarcasm)

 

This is one of the first issues newlyweds face. It’s an important conversation that should occur well before the big day; but probably not on the first date! Doing so can help ensure both you and your sweetie are on the same page. 

 

After all, marriage is “for richer or poorer” right? You share a last name, a house, and even a bed now…but what about a bank account? (insert screeching brake noise).

 

“Becoming One” With Your Finances

Keeping separate bank accounts communicates the wrong message to your spouse (and your children because they’re listening too). When talking about money, it forces us to use negative relational words like “mine” and “yours” which has a very possessive connotation to them. Just think back to the last argument you had with your spouse…these words probably didn’t do you any favors such as “she’s YOUR mother-in-law” & “it’s MY house too”. Sharing a bank account with your spouse, replaces the “it’s my money” mentality with more unified words like “ours” and “us” which promotes the feeling of being a part of a team. After all, who wants to ask their spouse to “borrow” money.

 

We’re in This Together

 It’s almost certain that sharing a joint account will cause conflict at one point or another when you forget to tell your spouse about a purchase however it also holds you more accountable. Knowing that your spouse can see what you are spending your money on and how much might actually be a good thing. This might prevent you from making foolish purchases that jeopardize your shared financial goals such as getting out of debt or saving for a down payment on a house.

 

Sharing a joint bank account triggers important money conversations with your spouse. You might be more willing to discuss your purchases with your spouse beforehand to make sure they fit within your budget.

 

Avoiding Financial Infidelity

 Combining your financial resources together reinforces trust in each other and prevents “money secrets” or “financial infidelity”. There is a much smaller chance of encountering a financial “surprise” if all the money goes into and comes out of one account that both spouses can see. It also simplifies paying the bills and makes tracking your household spending much easier.

 

But I’ve Got a Bad Taste in My Mouth

Let’s face it, sometimes you’ve been burned by an ex. I’ve witnessed divorces that ended up leaving the spouse responsible for piles of debt or closing out bank accounts and leaving town with the money. If this is the situation your spouse is coming from and they are hesitant to merge finances again, you shouldn’t take it personally…they are “trying to keep history from repeating itself”.

 

I Love You but You Have Some Baggage 

Putting money into separate accounts is a good idea if your new spouse comes with some baggage. Remember that creditors can garnish joint bank accounts so it might be wise to keep their name off. Psychologically, I also see problems arise when one spouse enters the marriage with alimony or child support payments and forces the other to pay them with joint funds. Lastly, maybe you or your significant other has some growing up to do financially before you have a “us” account. Some people just aren’t wired to be financially responsible so there’s no problem in waiting until things improve.

 

Let’s Compromise

Perhaps the right choice may be somewhere right in the middle. You share a joint account where each spouse deposits a portion of their income into for paying bills and working towards saving goals. This helps each spouse feel like they contributed towards process and gets to take ownership in the success of accomplishing shared financial goals. By also having separate accounts, it gives each spouse a greater sense of independence instead of feeling like big brother is watching over their spending.

 

Closing with My Personal Experience

My wife & I have been married for eight years and we’ve actually experimented with all three of these scenarios during that time. We started off with the “United we stand, divided we bank” approach which we both were actually content with. It wasn’t until I went to a financial therapy conference and listened to a presentation on this very topic. The presenter’s research was finding higher divorce rates among couples that kept separate bank accounts (that’s the Cliff Notes version).

 

Needless to say, it was enough evidence for me to come home and ask my wife if she was interested in making a change. Surprisingly, she was the one that wasn’t quite ready to “become one” with the “financial guru” (but she was previously divorced too). So we compromised and met in the middle.

 

We finally consolidated everything into one shared bank account when she stopped working because we both agreed we didn’t want feelings of “giving an allowance”. We’ve experienced success with all three models so I would suggest try different ways of handling the finances to see what works best for you and your sweetie.  While I’m an advocate for combining bank accounts, I’ve seen plenty of clients that have been happily married for decades and kept separate bank accounts.


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About the Author:

desmond Henry, a financial planner in Topeka, KS

Desmond Henry is a fee-only CERTIFIED FINANCIAL PLANNER™ professional and founder of Afflora Financial Life Planning in Topeka, Kansas. He helps the retiring/retired plan their finances and invest their money. CLICK HERE to learn more.