Should You And Your Spouse Use Joint Accounts or Separate Accounts?

It’s a question that inevitably comes up when two people marry. Should they continue to utilize their own separate checking and savings accounts, or should they merge their finances into joint bank accounts?AdobeStock_90060964

What works for one couple may not work for another. Because both banking approaches each have their own set of advantages and disadvantages, it’s important to explore, discuss, and weigh all options before arriving at a mutually agreeable decision.

Some of the distinct advantages of joint bank accounts include:

  • Because a joint account generally results in more money being pooled together, it can help with avoiding account fees such as those associated with maintaining a minimum monthly balance.
  • With a joint account, both parties have access to the money in it. This can prevent you from having to frequently transfer money between your account and your spouse’s account, and it can also be convenient in an emergency, or if one spouse passes away.
  • It can make it easier to handle shared expenses and bills. Instead of having to determine how much money should come out of your individual accounts each time a payment is due, you can simply write a check, or schedule bill payments, directly from your joint checking account.
  • Because both spouses can see the spending habits of the other, there is an increased level of accountability with a joint account. With both of you viewing the money as “our” money instead of “my” money and “your” money, there’s also a higher likelihood of financial communication regarding the household’s budget and purchases.
  • If either you or your spouse is a stay-at-home parent, a joint account could help alleviate tension and resentment. Since the stay-at-home spouse doesn’t have a traditional salary to place into their own separate account, having access to the funds in a joint account could help them to feel valued and compensated for work they do inside of the home.
  • In the event that one spouse loses their job or is out of work on medical leave, having a joint account already in place can prevent you both from having to merge your money at the last minute. It can also prevent you from having to cancel and re-do any bill payments that may have previously been scheduled from the out-of-work spouse’s account.

On the flip side, merging your money into a joint account has some disadvantages as well. These include:

  • Some couples associate a joint account with having to surrender their financial independence. With a joint account you and your spouse could feel trapped without each having access to “your own” money.
  • With many couples marrying later in life, there’s a good chance of both parties coming into the marriage with their own finances already in good, working order. For example, you both may have bill payments scheduled from your own individual checking accounts, or you may have your pay from work directly deposited into your own account every week. These things could be a bit of a hassle to un-do and re-do, so some couples may prefer to leave their accounts “as is” after they tie the knot.
  • With a joint account, there is a lack of privacy in regard to your finances. You may not want your spouse nagging you about that coffee you buy on the way to work every morning, or maybe you just want to be able to buy them a present without them seeing the transaction details on your joint debit card statement!
  • If one spouse enters the marriage with student loan debt or alimony or child support obligations, the other spouse could become resentful if those payments or to be made from joint funds.
  • When bills are paid out of a joint account, it’s fairly typical for one spouse to manage the couple’s finances. This could eventually turn into a point of friction if the spouse who’s managing the money starts to view the job as a burden or chore.
  • In the event of a separation or divorce, a joint account can become a bit challenging. Because both parties have legal access to the money in the account, it’s possible for one spouse to drain the funds without the other knowing. Even if you both leave the money where it is, it can be messy determining who gets exactly what from a joint account after the relationship is over.

As you’re deciding which type of account is right for your marriage, keep in mind that there is a third option – having a combination of both joint and separate accounts. Some couples keep a portion of their incomes in separate accounts so they can still access “their own” money, while each contributing to a joint account as well. A joint savings account could be used to save for things like a down payment on a home, college tuition, or a vacation, while a joint checking account could be used exclusively to pay major monthly bills such as mortgage payments or utilities.

No matter what banking approach you decide to use, it doesn’t hurt to revisit the arrangement on a regular basis to determine if it’s still the best fit for your family.

You can learn more about Bank5 Connect’s High-Interest Checking Account here: http://www.bank5connect.com/home/high-interest-checking

You can learn more about our High-Interest Savings Account here: http://www.bank5connect.com/home/high-interest-savings

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