The Marriage Conundrum: Joint or Separate Accounts?

This past weekend, the Honeybee and I had one of those conversations that most couples who are married long enough tend to have from time to time. But that didn’t stop our daughter, Nina, from shaking her head in complete amazement after overhearing it anyway.

Although I can’t remember the exact words, our discussion went something like this:

“Hey Len, did you happen to take the –”

“Uh huh.”

“So can I assume that you told Sharon –”

“Yes, yes. She said she’d have it next week, Honeybee. By the way, did you buy –”

“Yesterday; while you were pulling weeds. Which reminds me, have you called –”

“Of course. Did you really think that I’d forget?”

“I don’t know, Len. Last month –”

“Hut! Don’t you dare say it!”

“Say what?”

“You know what I’m talking about!”

“You’re darn right I do!”

Yes, after 18 years of marriage, the Honeybee and I are a well-oiled machine. And while many couples can brag about finishing each other’s sentences, we’ve got things so fine-tuned now that we simply interrupt each other and move on to the next subject.

Thankfully, we’ve got our household running smoothly too, including our personal finances.

To Share or Not to Share

Even a hopeless romantic has to admit that sharing money is one of the most challenging aspects of any relationship; it requires equal degrees of communication, trust, commitment and personal responsibility. That’s why, prior to tying the knot, one of the first big decisions any couple will make is how to handle the household finances. Basically, it comes down to one of three options:

  • Joint accounts
  • Separate accounts
  • Some combination of both

Of course, each option comes with its own pros and cons. Here’s my take on joint and separate accounts:

Joint Accounts

The Honeybee and I have always used a joint checking account because it makes our household finances easier to manage. We pay all our bills from the same account because we’ve agreed that every bill belongs to the household — regardless of who generated it.

Pros: This philosophy requires the couple to work as a team when managing the household finances. It also adds a critical check-and-balance system that encourages spouses to think twice prior to making unplanned or impulsive expenditures without first consulting their partner. As a result, it’s much harder for one spouse to become financially irresponsible without the other one knowing about it.

Cons: Well, it’s definitely tougher to surprise your spouse with gifts for birthdays or the holidays. To get around that minor inconvenience, I tell the Honeybee to avoid looking at the credit card statement until she opens her present.

Separate Accounts

When one spouse is unable to control their spending, separate accounts help reduce the risk of the irresponsible partner negatively affecting the good credit of the other. Separate accounts also may make sense when one spouse has premarital financial issues stemming from, say, a bankruptcy or trouble with the IRS. Separate accounts can also keep the peace in two-income households where the higher-earning spouse wants to allocate the household’s resources in relationship to income.

Pros: This approach permits each spouse to retain their financial independence, and allows each partner maintain separate credit histories. It can also reduce arguments when couples have differing financial philosophies, or can’t agree on how the household income should be spent.

Cons: Separate accounts are not only inefficient, but they also make money management more complicated. They also demand less financial accountability when compared to joint accounts, which doesn’t help folks who have trouble spending less than they earn.

Other Options

Many couples choose to straddle the fence and take a compromise approach that utilizes a joint account for the household bills and separate accounts for personal spending purposes. I’ve even heard of folks that prefer to use two separate-but-integrated accounts where each spouse has their name on both accounts, but they treat one as “his” account and the other as “hers.”

Summing It All Up

There was a time when I used to believe that married couples who didn’t share their finances were completely missing the point of marriage — but over time I’ve found that to be a naive oversimplification.

I now realize that, in the end, it really doesn’t matter whether you keep your finances joint or separate. What’s really important is that you choose the option that works best for your marriage. So … Which method do you prefer?

Photo Credit: Shelly Panzarella

Comments

  1. 1

    Chupacabras says

    I can see having a joint account for all the household finances and “joint” spending, but everyone needs their own “wants” account the SO has no say in.

  2. 2

    DC says

    My wife and I have been married 28 years and counting. We switched to a single, joint checking account after getting married and haven’t looked back. All income is household income regardless who earned it, and all expenses are household expenses regardless who generated it. We don’t play “games” like hiding cash from each other. (A friend of mine does that. Does he really think his wire doesn’t know?) Everything is above-board. Big ticket purchases — appliances, cars, etc. — are discussed ahead of time.

    To me, maintaining separate checking accounts, or insisting I get to have more “wants” money because I earn more, is simply the planting seeds of discontent that can lead to divorce.

    Both my wife and I exercise self-restraint. I don’t see how self-restraint can be learned if, for example, I insisted on controlling my wife’s expenditures by regulating “her” checking account.

    @Chupacabras: An alternative to actual, separate checking accounts is to create budget categories like “Wants – His” and “Wants – Hers”.

  3. 4

    says

    Len, it is so not like you not to have a strong opinion. You been hitting the Prozac lately???

    We share everything in our house too. My wife keeps the books and pays the bills. I handle all the investment stuff.

    She likes the control of having the checkbook…I get play money that usually lasts me for a whole month, cause I never go anywhere to spend it…

    • 5

      Len Penzo says

      I know, Dr. Dean. I’m normally much more opinionated — and I suppose it would be a more interesting post if I took a strong position, but I sincerely believe that it is pure folly to insist that one size fits all here.

      If I was married to someone who was unable to control their spending habits, I guarantee you that I would not have a joint account. Then again, as long as two people have the same financial philosophy, I see no reason why folks wouldn’t take the joint account approach because it is not only much more efficient, but it simplifies management of the household finances.

      • 6

        says

        If you’re married to someone who is unable to control their spending, then I would set it up to where the get either a pre-paid credit card, or their own checking account that you put money in. Its sad to have to manage someone like that, but its better than having separate checking, and each being responsible for a set amount of bills. What happens when one party doesnt have the money? The other has to cover, and that just sets up a habit.

        My wife and I have had joint since we were dating and living together in college. She’s a spender, I’m a saver, but she’s not bad enough to where I have to worry about money. We decided to have one joint where our paychecks were deposited for bill paying, a joint savings that is automatically transferred to (also the “round it up” feature that cards offer go here, and then our own private accounts that we take a percentage of our joint income and split between us every paycheck. We also have our own credit cards.

        Bills, fun activities, and pretty much everything comes out of our joint account. If she wants to go shopping or I want to buy some tech toy, that comes out of our personal/credit card, no questions asked. It also makes it easier at christmas time to transfer X amount to our personal ones, so the other can’t see where you spent money.

        • 7

          Len Penzo says

          Sounds like you have a good system going there, Josh. In this case, I think you prove that the best system is one that works for both parties.

  4. 8

    says

    We have a joint account for household expenses, and our individual accounts for our own expenses. I’ve considered merging completely but it’s a deep talk we’d have to discuss.

  5. 9

    says

    My parents always had everything completely shared, so I always kind of thought that was the only acceptable way. But they had the kind of marriage where my father had the career, and my mother worked part time, in lower-paying jobs so she could be home when we got home from school. She wasn’t earning a salary for her contribution to the household, so it seems more natural that she would definitely be able to access the money my father earned.

    Now that I have my own career, and with the high divorce rates, I would be scared to give up my own sense of financial independence I think. But I bet after a few years of marriage to the right pesron, I could totally change my mind.

    • 10

      Len Penzo says

      That’s pretty much how it was in my house, although my mom was a full-time stay-at-home mom.

  6. 11

    says

    I’ve been married for over 10 years and together with my spouse for 15 and we still have separate accounts and each pay different bills. The reason? Pure laziness. We just never got around to changing our system once we got married. We’ve only gone as far as putting the other person’s name on our accounts. It’s just now after 15 years we’re like..hey, maybe we should simplify this a bit but that was like 2 months ago and I still have done a thing yet.

    • 14

      Len Penzo says

      Agreed, it sucks … but it’s also a great check and balance that can stave off bigger issues down the road, Robert.

  7. 15

    Kat says

    Thanks for helping me realize I’m not crazy and our marriage is doomed for not having a joint checking account.

    My husband and I started off with a joint checking account and knowing so much about my husband’s spending and bothering him so much almost lead to divorce. Now, we have separate accounts he transfers me what I want/need for certain expenses and HE can drive himself nuts over the bills not getting paid because he overspent. Needless to say, he’s changed on his own and I no longer nag :)

  8. 16

    khaye_hart says

    For me, I grew up with parents sharing an account even though my mom stop working to be a full time mom at the age of forty and only my father earned for the family. It is hard to be married, like now, with a bad feeling that we have separate account. For me, marriage is about being as one, sharing almost all things and that we do not have. If we are just living together then maybe I understand but this makes me feel untrusted at all. If somebody is afraid about divorce, I can’t blame you because it is also true but in my case, the feeling can just add up for reasons to be divorce and I’m very willing to go with only what I have before marriage and find the right man who have the same idea of marriage that I have.

  9. 17

    Pharmercist says

    Having the IRS on your neck, as I do is hard on a marriage; however my auditor has generally been fair. More than I probably deserved given that I hired both the embezzling bookkeeper and the cpa with the liberal interpretation of tax law. Which coupled with her inability to finish, well, anything, in a timely fashion, led to even more penalties.
    That said, the IRS will work with you, the state will not. They levy everything I have my name on. Regularly. So, no joint accounts here.
    But we maintain mutual accountability – I write the checks and he signs them. Bill pay items (electronic) we schedule together.
    It’s not even close to the best idea, but it’s what we have for now.

  10. 18

    SassyMamaw says

    We have “integrated” accounts. Both our names are on all accounts, but one is his, and one is mine. I am in charge of the budgeting, and being sure the bills get paid, because I am the nerd and hubby is the free spirit. But I give him the bills to be paid online, because he is more techie than I am. I’m old school, and still have a few I write checks for. We’ve been using this system for about five years, now, and it’s worked better than anything else we’ve tried.

  11. 19

    Taddy says

    I grew up in a home where 90% of my family (this includes extended) were always bickering about money and stealing/borrowing money and never repaying it back, so I learned a hard lesson growing up. It burned me bad (sad when you’re 7 and find out grandma stole your kitkat money of $3) so I have a hard time trusting others when it comes to money.

    The way my husband and I have it, we have a separate account for our mortgage (under his name), a joint purely for tax purposes (only used during tax season), and then we each have our own bank accounts. My bank account is set up so that I transfer each week a set amount to go towards the mortgage, and since he makes much more than I do, he tends to pay the rest of the bills. Groceries are paid based on “is this mine, yours, or ours?”, with ours being paid by whoever happens to have their card out at the time.

    This works great for us because I also have student loans that I had before we started dating, so I take care of that without it impacting him, plus this gives me peace of mind and lets me be able to have charge over my own finances.

  12. 20

    Jestep says

    We use a straddle approach. A common account for bills and common expenses, and personal accounts and credit cards that we manage on our own after all bills are paid and savings / investment contributions are automatically transferred. We did a single joint account for a long time, but just find it easier not having to explain every random expense to the other party. We do have signing and online banking privileges on each other’s accounts just in case but not joint ownership. Nowadays you can pretty much automate all the transfers so there’s really no work to manage it once you get them initially setup.

  13. 22

    says

    We’ve been married for almost 24 years and we have separate accounts. We tried a joint account about 15 years ago and it was a disaster, so we went back to separate accounts.

    I’m the banker in our family and I always know within a few dollars what is in the account. Plus, my wife can spend her own money, without any input from me. Separate accounts just works better for us. Other couples may have a different experience.

  14. 23

    says

    We go with separate accounts and a joint individual account. We have made the decision the best way to tackle our debts is to make it personal and pay them with your own money. It has worked out well so far.

  15. 24

    says

    Just got Married this Last December so I was reading your article in prep for tax time as this will be our first year filing together. Thanks for posting. I have a friend who files head of household. How is that applicable?

  16. 25

    says

    We share everything as well: we have joint current (checking) account and savings account. Our ISAs (a particular savings account in the UK) are separate but this is because of the instrument not because we wanted it this way. We also have fairly good understanding of how this works after 21 years married life. Unusual purchases we discuss. However, I have friends who never shared accounts and are happy with their arrangement: so, each to their own, I say.

  17. 26

    WB says

    Joint account the whole 33 years of marriage. Never a problem. We have a budgeted item called ‘Mad Money’ for each of us. No questions asked about how each of us spends our mad money.

    Have friends that have individual accounts and that works great for them. As someone above said, as long as you are on the same page either way will work.

  18. 27

    says

    I currently only have a single account to myself at the moment, but if the day were to come when I got married or in a serious relationship, I would definitely consider getting a joint account to make everything easier as long as both people were making steady, decent income.

  19. 30

    john digmeme says

    My wife and I, married in 2009, 29 and 32 yrs of age, use the third option. We each drop a specific amount into our joint checking account every month. This account is used for our bills and any extra we put towards travel or something we both want to do.

    The remaining cash we earn every month goes into our own accounts, while we also have our own 401k’s, IRA’s, and other investments – that way we can buy any stupid stuff we want and no one gets upset; well, theoretically. In reality, we both love to lambaste each other for our spending choices – but its all in good fun since neither of us relies on the other financially. It’s worked out fantastically, and also makes a lot of sense for a young married couple in 2014.

  20. 31

    says

    We’ve been married for 6 years and we have joint accounts, which works really well for us. For us, having our finances aligned is another way to have our dreams and goals aligned. I think you’re completely right–whatever works best for your marriage is going to yield the best results!

Trackbacks

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>