Separate or Joint Bank Accounts for Spouses?
A Couple’s Financial Strategy Can Help Avoid Marital Problems
Feb 7, 2009
Money is often cited as the leading cause of problems in marriages, but married couples can find a way to manage their money with fewer arguments and less stress. Spouses should decide whether having separate or joint bank accounts are the best solution for their money management plan.
When Married Couples Have Separate Accounts
Some spouses choose to keep their finances completely separate. With this financial strategy, each partner has a collection of bills to pay. Couples who marry at a later age or who are remarried may find this strategy useful.
“You both may already have successful careers and financial systems set up that you want to keep intact,” says CNN/Money contributing columnist Gerri Willis in the May 16, 2005 article, “5 Tips: How to Talk to Your Partner About Money.” “This is also a good option if one partner has credit card debt that the other doesn't want to absorb.”
Married couples in favor of separate accounts say they are able to retain their independence and don’t need to ask permission to spend their own money. Also, they do not burden their spouses with pre-existing credit card debt or other money problems.
There are some challenges for married couples who choose to keep their finances separate. Couples with separate accounts must keep very detailed records to ensure that all bills are paid, especially ones that only crop up once a year, says Kiplinger's Personal Finance reporter Stacy Rapacon in, “Marriage and Money.”
And married couples who don’t want to burden each other with financial details may find that when financial problems arise they are slower to communicate about these money problems. By the time they share the information, the situation may be very serious. That’s why couples who choose to keep their accounts separate must be sure to communicate about their financial strategy and any money problems.
Joint Bank Accounts for Spouses
A second option for married couples is to combine all their money into a joint savings and joint checking account. Under this plan, all household money is pooled into the joint accounts and all bills are paid from these. It is easy to track all expenses with this method.
“It also helps us keep our marriage transparent,” Therese Lizardo-Escaño told Rapacon. “Because we know how everything is being spent, we can ask questions if we have any.” Joint accounts require a willingness to discuss money management, to compromise when there is disagreement and to agree on a spending limit for purchases that are not discussed in advance.
According to Matthew Paulson’s June 29, 2007 article, “Should a Married Couple Combine Their Finances?”, there are significant advantages to having joint accounts even if it can be challenging to agree on household money management. “Two people with shared common goals can accomplish a lot more than two spouses going off in their own direction,” Paulson says. “It’ll make sure that you two know what’s going on in each other’s financial lives. You’ll discuss shared goals and ideas and work together to accomplish them.” About.com financial planning guide Jeremy Vohwinkle agrees. In "Joint Or Separate Checking Accounts?" Vohwinkle says joint accounts can be the easiest logistically, but notes this method may not work well if one partner is deeply in debt or has trouble keeping up with ATM receipts.
Shared & Personal Bank Accounts for Spouses
The final option for household money management is for couples to have a joint account for household expenses and separate individual accounts. Under this plan, partners agree how much each spouse will pay into the joint account each month. Married couples with similar salaries would each pay half of the expenses. Couples with a large difference in their salaries would agree to pay a percentage of the expenses based on their incomes. Willis cautions that couples need to focus on working together, rather than deciding who is “worth” more and gets a larger vote. The remaining money would go into the individual accounts to be used as needed or desired.
“I believe that all women and a lot of men psychologically need their own money,” Olivia Mellan told Rapacon. Mellan is the author of Money Harmony, [Walker & Co., 1994]. “It allows them a sense of autonomy in the midst of intimacy.”
Indeed, couples who use this method find that they have the financial independence to make the purchases they choose without clearing them with their spouse. “One of the big advantages to this method is that each person retains his or her own autonomy and financial independence, which helps avoid the use of money as power in the relationship,” Vohwinkle says. Fighting may be reduced because neither partner has to justify or explain their spending.
Married couples can reduce marital problems and fights about money by choosing a financial strategy that works for them. Couples should decide whether separate accounts, joint accounts or a combination of both is the best for their household money management style. For more information about money and marriage, read Money Tips Newlyweds Need and How to Plan a Monthly Budget for Home Finances. For more about marital conflict negotiation read Choose a Therapist for Marriage Counseling.
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