Marital Finances: Joint or Separate Accounts?

For many people, getting married means joining forces, combining finances, and taking a team approach to money management. Pooling financial resources isn’t necessarily the right approach for every couple, though. What’s best for you depends on how much you and your spouse make, how much debt you have, or even your financial comfort level.

Before you take the plunge, take the time to weigh your financial options and get a sense of how you want to approach money management. Take a closer look at the pros and cons of joint and separate accounts for married couples.

Pros of Joint Accounts

One of the biggest perks of putting all of your money into a joint checking account is that you’ll have fewer accounts to worry about. Together, you’ll probably have a single checking and a single savings account, which means you’ll have minimal paperwork and fewer account maintenance fees than you would have with multiple separate accounts. For many couples, this ability to streamline accounts is attractive, because it means less work and lower expenses.

In addition, with a joint account, both partners have equal access to the same finances. That means you don’t have to shift money from one account to another when one of you needs to pay for a major purchase. You also won’t have to pay each other back for expenses, because all of your money will effectively be shared funds.

For some couples, establishing a joint bank account can be a sign of trust. After all, when your livelihood is at stake, you truly have to trust the other person that has access to your checking and savings accounts. A joint account can also help you establish a united front when it comes to finances since there will no longer be a sense of “yours” and “mine.”

Cons of Joint Accounts

For other couples, establishing a joint account is the equivalent of the worst marriage advice possible. Even if you’ve discussed money matters until you’re blue in the face, not everyone can see eye to eye when it comes to finances. Perhaps one of you prefers to get ahead on bill payments but the other would rather set aside money for savings or spend available funds on fun purchases. If you can’t come to an agreement about how to spend what you have, you could end up arguing constantly or even paying frequent overdraft fees if one of you overspends.

If you’ve been in the workforce for long, you might be accustomed to having access to a certain amount of money. Combining finances with your new spouse can be exciting because you’ll suddenly have access to much more money. For some people, however, this can actually have a negative effect since it can give a false impression that the couple has more money than they really do.

In addition, if you’re used to earning, spending, and managing your own money, you could face a seriously unpleasant realization that the money is no longer truly your own. If you once allowed yourself to spend a few dollars on silly purchases or even things you’d rather keep to yourself, you might find that the lack of privacy a joint account offers is unsustainable.

Pros of Separate Accounts

Though maintaining separate bank accounts might not make you feel like as much of a unit as having a joint account does, keeping things to yourself does have its advantages. First and foremost, you’ll be able to retain much greater control over your own funds. Though you’ll need to consult with your partner about the amount of money you want to spend or save to meet mutual goals, you can still do all the day-to-day money management yourself.

While neither of you might ever consider separating or dissolving your marriage, it’s important to remember that keeping money separate also offers peace of mind. After all, either partner can withdraw all available money and close the account at any time. If you want or need extra assurance that your finances are in your control and available when you need them, having separate accounts is a smart choice.

Cons of Separate Accounts

One of the biggest drawbacks to keeping your finances separate is that it’s difficult to get a true understanding of how much money you have together. This can make financial planning challenging in the long term.

Also, when you’re married, keeping your cash separate can help you avoid arguments and offer peace of mind, but it doesn’t mean the two of you will never be linked financially. After all, even if you have different checking accounts, you and your spouse can still make a number of major purchases together, from cars and boats to houses and commercial properties. If your spouse hasn’t managed money wisely in the past and has accrued major debts or bankruptcies, you could also feel the effects.

If you’re worried about your partner taking an irresponsible approach to money management, have a serious talk, preferably before you tie the knot. If you really want to make sure your spouse is being completely forthright about past bankruptcies or other financial trouble, you can always search public records or perform a background check online to get the facts.

Remember that you don’t always have to choose between a joint account and separate accounts. Many couples establish a joint account, which they use to pay monthly bills and make major purchases. They might also have separate accounts where they work toward individual savings goals or where they maintain independent allowances. For many couples, the balance between independence and working together is a smart solution that helps them stay on track financially while still maintaining some level of freedom.

Ultimately, every couple is different. For some, combining finances into a joint account is clearly the best option, while for others, maintaining separate accounts is a safer bet. Take the time to talk with your spouse about your financial options, and decide together whether having joint or separate accounts is best for the two of you.