You two share your home, your bed, your hopes and dreams. Should you also share a bank account? The short answer: “It depends.”
Combining accounts sometimes simplifies dealing with finances or results in one person turning money responsibilities over to their partner and no longer engaging in the family’s financial planning. Keeping separate accounts complicates tracking expenditures though allows two financially independent people to still control their pocketbook.
What to do? Failure to talk about your financial relationship risks everything from fights about what a partner sees as their earned money to squirreling away forbidden purchases or outside income.
Consider these points of both arrangements, and candidly discuss what you each feel works better.
Pros of combining:
- Full disclosure. You see what both you and your partner spend and frequently check with each other about expenses.
- Easier management. Paychecks go to one account and bill payments, groceries, dining out and all other expenses come from that same account. Who pays for what is no issue.
- Accountability. Spending habits become clear and your domestic partner also turns into your accountability partner to reach joint goals and help you kick habits bad for your financial success.
My husband and I, for instance, merged finances and still keep separate credit cards; we give ourselves a set card amount every two weeks to spend as we please. This keeps us on track for our bills and goals and allows us freedom and flexibility to spend within limits.
Pros of separate accounts:
- Equality of contribution. When one partner makes more than the other, separate accounts and dividing bill payments proportionately helps each feel they contribute without carrying the full weight of payments.
- Unequal debt. When either partner brings debt into the marriage or relationship, keep things separate until paying off the debt. This allows the indebted partner to work on managing money and ensures forming good financial habits before combining accounts.
- Unequal spending habits. Put aside what’s needed for bills and goals; spend how you wish whatever remains. This works well when one partner spends more or less than the other. Spending habits cause tension when they differ but draw from the same account.
An excellent source for tips on separate accounts: “How to Maintain Separate Bank Accounts as a Married Couple” by Jacqueline Curtis.
Either path means you must set expectations and commit to communication – not easy for any two people talking finance. Money fuels many breakups. Some couples consider joint accounts some insurance against divorce. Other couples think separate accounts make splitting up easier.
Where you live as marrieds influences this debate, too. California, for example, is a community property state where both spouses equally own all money earned by either from the beginning of the marriage until the date of separation.
Talk in depth to your partner about finances. If merging accounts, determine how you’ll manage the accounts and spending. If keeping accounts separate, assign how and who will pay which bills and then allocate toward joint goals.
Having separate accounts doesn’t mean you two have separate goals, and it’s no excuse for financial secrets. Set a schedule for money dates and check-ins and always evaluate financial strategies as your situation changes.
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Mary Beth Storjohann, CFP(R), is the founder of Workable Wealth, an RIA in San Diego. She is a writer, speaker and financial coach who is passionate about working with individuals and couples in their 20s and 30s to help them organize and gain confidence in their financial lives. She has been quoted or featured in various industry publications on the local and national level. You can find her on Twitter at @marybstorj.
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