Just Married? Joint vs. Separate Accounts

One of the happiest times in a couple’s life is joining together in holy matrimony. As you settle in your life together, one of the decisions you’ll have to make it whether to have separate or joint bank accounts. There are pros and cons to each, so think through the options.

Joint accounts

With a joint account, both spouses’ names are on the account. You’ll probably both deposit your checks into this one account. When it’s time to pay bills, one or both of you will write the checks (or pay online) from this account. Other spending also comes from this account.

One of the benefits of having a joint account is that all the family money is in the same place. You can easily tell the total amount you have to run your household. Budgeting can be much easier when all the funds are in just one account. Having two accounts means you’ll need open communication about what’s the account and what you’ll be spending. Neither spouse has to feel slighted about the other being stingy with “their” money.

There are some drawbacks to having just one account. Both people accessing the account must be careful not to overspend. You can’t take for granted that the balance is the same as the last time you checked because there are two people spending from the account. If you have a spouse with an addiction or spending problem, they could drain your account leaving no money to cover household expenses.

Another drawback is that there’s no privacy. Your spouse knows all your purchases, even when you’re purchasing a gift for him or her.

Separate accounts

Spouses may choose to keep their accounts separate. This is ok, too, but paying household bills will take a little more work. The two of you will have to write out a household budget and decide who is going to pay which bills. You may decide that one spouse is solely responsible for bills or you may split them up based on your incomes.

While the accounts are separate that doesn’t necessarily mean that each account off limits to the other spouse. You can still make it so both spouses have access to the accounts, with one spouse primarily accessing the account.

With separate accounts, there may be a little more freedom to spend without needing to discuss it first. Some couples don’t feel it’s necessary to discuss every single financial decision. That’s ok as long as you’re not using the separate account to hide serious financial issues from your spouse.

Both

Who says you have to choose one or the other. You and your spouse can have several accounts:

A joint checking account for paying bills. You may both deposit a certain amount of money in the account to cover household bills. Or, you may have all your paycheck deposited in the joint account and divide up the leftovers.

A joint savings account for meeting family savings goals. You’d both contribute to the savings account for things like home or car down payment, family vacation, or holiday spending.

Separate accounts for each spouse. Spouses may want some freedom to spend after all the bills are paid, so you have a separate checking (or savings account) that holds money you can freely spend.

There’s not necessarily a hard right or wrong here. You and your spouse should choose what works best for your marriage. If you set up accounts one way and it becomes a point of contention, figure out the root of the problem and change the account setup, if necessary.