Chatting with a friend this week, she told me her and her husband have separate checking and savings bank accounts. She pays the bills each month, including the mortgage of the house they own together, and he writes her a check for his half. She says, “It’s just easier for us”. I was really surprised at hearing this, as I grew up in a family of shared finances and my husband and I have joint accounts. I didn’t realize couples did it any other way. It really got me thinking about the advantages of
joint vs. separate bank accounts for married couples.
Advantages of a joint bank account
- Encourages regular discussions about finances
- Supports working as a team to meet financial goals
- Removes hassle of splitting up costs or bills
- Makes you check in with your partner about spending habits
- Gives both partners equal say in decisions involving money
- Eliminates the “my money versus your money” mentality
- Reduces competition on salary contributions
Advantages of a separate bank account
- Both partners are equally responsible for managing finances
- Gives freedom and privacy around spending habits – birthday and Christmas surprises are more fun!
- Eliminates need to explain and justify every charge
- Easier to dictate distribution of money (one account for living expenses, the other for fun or saving)
- Avoids one partner’s credit history from affect the others
- Eases transitions in the event of separation or divorce
- Allows partners to give themselves spending limits or allowances, instead of one partner dictating over the other
Like most couples, my spending habits are much different than my husbands – he saves every penny he can, and I love to buy gifts for others and go to movies. And buy running shoes. And Cheez-Its. We found ourselves fighting over every single credit card charge or ATM withdrawal. To avoid this, I opened a separate checking account for all of my freelance writing earnings. We consider it “extra” money apart from my full-time job, and we agree I can do what I want with that cash. I can use it to build my freelance business or buy a gang of sea turtles. My husband never sees that money and I am still contributing my salary to our financial goals, so the pressure is off.
Some couples I have spoken with believe that since they are united in marriage, so should their finances be. Other, like my friend, feel it’s just easier to keep the individual accounts they had before marriage. If you decide to have separate bank accounts, make sure your partner has access to your accounts in case of an emergency. If a joint checking account or savings account is best for your household, set guidelines for spending and split up administrative responsibilities equally.
When it comes to money, what is most important is open communication and mutual respect. What works for one couple might not work for you. Sit down and go over the list of advantages above and add your own. Come to a decision you both are comfortable with – there is no wrong or right choice.
Your friend and I have a similar setup. I’m more of the control freak when it comes to finances. My husband and I maintain separate checking accounts but both of us have access to them. Same way with savings accounts. We’ve had arguments about money in the past, as most couples do, and it’s just better for us to have our own separate accounts. I’m glad to say that he’s getting better handling his own finances although I don’t think we’ll ever have 1 joint account.
Megan @ Fiterature says
Thanks for sharing, @sunflowergurl! So does one write the other one a check each month?
Bargain Babe says
@Sunflowergurl That’s an interesting set up. I like the simplicity of having separate accounts (less fighting, fewer rules about spending and saving), but I also wonder how you split expenses. Do you split it 50/50 or prorate by income levels?
I think separate is better for most things but I’ve found its important to keep a joint open just in case there is a check with both names on it that needs to be deposited ie: tax refund…. Eliminates a lot of hassle at the bank. Speaking from experience on this one.
Bargain Babe says
@Chris Good point!
Jen Y says
We’ve had joint accounts since before we were married & living together. We moved everything into joint accounts once we became engaged back in the 1980’s. We each had a savings account that we had our employer automatically make deposits in back then & we just left those as they were, each our own account, but made them accessible to each other. I have not earned a paycheck since 1993 so my savings holds my last paycheck ( a little over $300!) & we pretty much just leave it there. My husbands savings is our holding place for big yearly expenses just to keep it a little more safe than our checking account would be. It’s also the place we go when we’ve bombed our household budget & need to bail it out.
In our family, my husband does the grunt work of budgeting, setting it up, monitoring, maintaining it ect. He goes over things, plans, decides how much goes where & then we sit down & go over it together. I then give my opinion on how it’s been divided – we usually pretty much agree but occasionally I’ll want to save more in some areas or spend more in others. He usually goes back & tweaks it if I’m not happy with something.
My job is maintaining the weekly household budget & taking care of details. It’s basically one category of our whole family budget. I do all of the family shopping, keep up with reciepts, what was spent where, ect. Then my husband takes those on a weekly basis & keeps it all organized in the big family budget. I usually collect our mail so I stay on top of things by reading statements as they come in. Occasionally I go over spending costs with him since I do all of the shopping & he has no idea what things actually cost.
Then we have other, even more secure joint accounts for long term goals: another car, house renovations, vacations, retirement, ect. These are rarely touched except to be added to.
This system has worked so well for us. We’ve met so many big financial goals this way that we don’t have any desire to make any changes with it. We have been talking more though, about trying to at least learn & understand what the other does in maintaining things. As we age & near retirement, we want both of us to be able to deal with things should something happen to one of us. It’s hard to make ourselves do this. We’re both very comfortable with things as they are but in helping our parents we’ve seen that this is really an important part of financial freedom as we age & protecting ourselves & each other too.
Bargain Babe says
@Jen Y What a great system you and your husband have. I love that both of you play a crucial role in maintaining the household budget. Yes, learning how to do each other’s part is important. Perhaps you could put it into writing, so that years down the line, if you have to take over his job or vice versa, you have something written to refer to. I would never remember little details years later! Writing it down will also make you realize how many steps they are!
Megan @ Fiterature says
@Jen, it’s like you are running a small country over up in there! I LOVE how systematic you guys are – makes total sense! Thanks for sharing!
We have been married a long time and while all accounts are joint, one is my checking account, he has one and the same with savings accounts. I do shopping, gifts, cleaning service, gardener, child costs and usually eating out or movies. He handles the rest as well as retirement– he also happens to be at a professional level with investing so this makes sense for us. When we tried one account, I would be planning on spending a set amount a week later and then would see that he had purchased something with that money so this way makes sense for us. All money is joint. We are suppose to discuss it if there is a purchase more than usual– iPad, phone, computer, furniture, car. With all the hacking going on, I have been using cash more for purchases which cuts down on expenses!
Bargain Babe says
@Jan Great system! My husband and I have a similar set up. We kept the bank and savings and retirement accounts we each had coming into the relationship, but we have access to the other’s accounts. His checking pays most of our bills, while mine is for my business expenses and acts as a back up savings account. I’ll write him a check when our household checking account is low (like after Christmas). My account also funds the girls’ 529 accounts and big one-time purchases, like a car downpayment. It works for us!
Your comment about separate accounts being an advantage in the case of a breakup is probably not true in community property states like California. It will still be deemed to be owned half and half, so if one spouse saves more than the other the one with more money in the bank will likely have to give some of it to their spouse.
Since the beginning of the Bargain Babe blog, this topic has come up a few times, the last of which was in April of 2012. So I will again post what I wrote on April 23:
I know I commented in this regard long ago. What works for us stems from years ago when my husband had child support for his then-young sons. We had an “our” account, a “his” account, and a “my” account. We each individually fund our specific accounts. Each month, we both contribute from those accounts a set amount into the joint (“our”) account, which is used for all common purchases, e.g., household. The pronoun designations aptly describe how the accounts were–and are–used. We are joint tenants on each. His account is at a different bank than the rest. I regularly reconcile–to the penny!–the “our” and “my” accounts. It has worked for us without a problem for over 30 years. Oh–he is in charge of our investments.
We have a shared bank account for shared savings and bills and shared expenses.
Then we have our separate accounts for our personal expenses!
Best of both worlds it seems
Both. We have two shared accounts and each a personal account. Shared account one is for fixed loan expenses (mortgage, auto loans, student loans). Shared account two is for variable budget items (utilities, groceries, etc.). Personal accounts are for whatever the heck we each want. If I want to spend my personal funds on bubblegum and unicorns I’m free to do so, because I know all of the household bills are coming from those other shared accounts. It was very easy to have my direct deposit split into three accounts like this.