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Joint vs Separate Accounts for Married Couples

Joint vs Separate Accounts for Married Couples

Marriage is meant to be a sacred union between two people who intend on spending the rest of their lives together. They are seen and want to be known as one: what’s yours is mine and what’s mine is yours. But is it really that simple when it comes to finances?

Money matters in a marriage is a complex topic of discussion, but it needs to be done. It should be discussed before reaching the altar. As a couple you need to consider your current situation as individuals and how it would affect your union. Assess each one’s financial position taking into account assets, income, debt, child support, alimony etc. While the topic of finances are on the table you might even decide on the nature of your marriage: community of property or on a pre-nuptial contract. It is during this discussion that you can determine which is best: joint or separate bank accounts.

A joint banking account used in a marriage has many advantages. Generally, it is considered convenient for handle the household finances from one bank account for effective budgeting. With a joint account, each spouse has access to funds which can prove useful in the case of emergencies.

It is perfect for the young couple starting their lives together making many of their first big purchases as a married couple. Young adults starting out their careers may not earn enough to make these sorts of purchases independently, therefore combining incomes would give these young couples more options. Also many financial institutions require all the particulars of a spouse when applying for a home loan, therefore married couples have to work as a financial team in certain situations.

Joint banking accounts can work for any marriage regardless of when you start out, it all depends on the couple to make a success of it. Joining forces financially requires teamwork, trust and mutual respect.

Joint bank accounts can fail for various reasons. The main problem with having a joint bank account is in the event of a separation or divorce. Chances are one spouse might clear the account leaving the other in financial trouble. Or there might be complications and confusions as to how the money should be divided.

Another factor that causes difficulty in sharing finances are debt and other financial baggage brought into the marriage. One spouse may feel resentment towards the other for having to contribute to financial obligations that were made prior to the marriage.

Miscommunication also causes the joint banking system to fail. This happens when there is a lack of communication when it comes to financial planning. Each one spends or misuses the account without considering one another. This not only causes tension in the relationship, but affects the couple’s financial health.

Employment status plays a huge role in making the decision. In the case of only one spouse working, the working spouse might want to maintain control over all financial matters in the household as the breadwinner. On the other hand, if both husband and wives were working bringing in more or less the same income each month, they still may want to keep things separate to maintain their independence from one another and enjoying the feeling of spending their own money.

In essence, each situation is unique to each marriage. There is no code to tell if a joint bank account would work or not. It all depends on the individual and how he/she interacts in the marriage. A couple may choose to keep their separate accounts and have a third account which would be the joint banking account. The separate accounts are for each one’s personal use, maybe to settle debt made outside the marriage or any other issue that is pre-marriage. The joint banking account is then used for all financial matters that are shared within the marriage. Between you and your spouse, decide how much each one should deposit into that account that will be sufficient to pay the household bills and other expenses.

In the end, there is no right or wrong way of managing finances in a marriage. Having separate accounts does not infer that there is a lack of trust in the relationship. Nor does a joint banking account suggest that a marriage is rock solid. Both joint and separate bank accounts can work – each married couple should choose a method that works best.

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