A common question among newly engaged and newly married couples is whether or not to have joint, separate , or mixed banking accounts. There are pros and cons to each method. Deciding on which method to use should involve discussion in the practical and relational realm.
Practical Issues Relating to Joint, Separate, and Mixed Bank Accounts
A Joint Checking Account
- Makes Things Simple– there is less paperwork, all the money goes to one place (regardless of how much each person makes),
- Diminishes Confusion and Arguments– money arguments can be greatly diminished when there is an understanding that bills, vacations, and extras all come from the same pot. There isn’t fighting over whose money pays for what when everything is joined together.
- Unity-for many couples, choosing a joint checking account goes beyond the everyday specifics of money spending. Many feel it tells something about their relationship. Marriage is seen as oneness, and that means in all areas, including finances. In marrying one another, couples are leaving their separate ways behind and joining their lives together as one.
- Past History- some individuals come to marriage with past history of large amounts of debt, child support, alimony, etc. Couples might argue that it isn’t fair to ask the new spouse to contribute to those past things that do not involve them.
- Salary Differences– often times, one couple makes more than the other. Joint checking accounts don’t reflect the salary differences when it comes to paying for things.
Separate Bank Accounts
- Individual Spending- this can diminish spending arguments (especially if one spouse tends to be more of a spender than the other). Each person spends from their own account and they tend not to worry about what the other person thinks of their spending.
- Communication- since things are handled separately there is little to no communication about finances in the marriage and family. This can lead to issues with trust and security.
- Who Pays What- with separate banking accounts the most common issue seems to be, who pays for what? If your money is separate how do you determine how to pay for bills, groceries, vacations, and other joint activities.
- Paperwork- there is more paperwork to deal with when handling separate accounts than one.
Mixed Accounts (one joint account and two separate accounts)
- Both worlds- you can merge major expenses in one account (such as the mortgage, bills, vacation, etc), and have separate accounts for each person to have as their personal spending money.
- Paperwork- there are three accounts to keep track of
- Decisions- the couple must decide what things should be paid for from the joint account and what things should be paid for by the individual accounts. They also need to determine how much each of them contribute to the joint account, especially if there is a salary difference.
In our experience, my husband and I have found that having two accounts worked best for our life situation and best reflected what we believe about our marriage. We have two joint accounts. One major account was set up that deals with all our bills and everyday living expenses such as groceries, gas money, dry cleaning, household expenses, etc.
Our second account that is set up deals with our “fun money.” I am a stay at home mom so we live on just my husband’s salary. I do a few things here and there to earn extra money for us. However, we don’t use that money for our bills. We put that money into the second account and use it for fun stuff, such as hobbies, clothes, presents for people, extra things our kids needs, entertainment, etc. This has been an excellent system for us because it keeps our fun spending completely separate and we don’t have to specifically budget it into our major expenses. Whatever is in the second account is the amount we have to spend and that’s it. Some months it is more than others.
The great part of it is that we don’t end up short with our major expenses because we spent too much of the money on extras. When all of the extras come from one place it gives us much more freedom in our spending. We also chose this method of banking because it best reflects what we believe about marriage. For us, the question was, “How intimate do you want to be?” We felt like in order to experience the closest relationship possible, we needed to truly be one, to truly make our two lives one. If we lived separate lives in some areas and joint lives in other ways, we felt it would impeded our oneness.
In terms of “fairness” when one spouse makes more than the other, or the couple lives on one salary, we still go back to the oneness issue.
In marriage, you are joining two lives, no matter what.
Each person plays important roles and each person contributes to the marriage in different ways, not always the same way (such as equal finances). There are many ways to set up your lives financially. The biggest thing to remember is communication! Always decide beforehand how you are going to handle issues such as bank accounts and be sure you understand the reason behind why you are choosing the method you are.
Whether you choose a joint bank account, separate banks accounts, or mixed bank accounts, remember they work best when they are completely understood practically and relationally.
This is a guest post by Rebecca. A loving mom and freelance writer.