A Joint Bank Account vs. Separate Finances: Which Is Better?
My husband and I didn’t exchange traditional marriage vows. We didn’t promise to love each other “in sickness and in health.” I didn’t pledge to obey him till death do us part, and we certainly didn’t include that bit about “for richer or poorer.”
Why? Because we know that money (or the lack of it) can ruin relationships — especially when two people have opposite ideas on how much should be spent, saved, or borrowed.
We’ve been there. In the four years that we’ve been married, having debt — particularly student loans — has caused us several difficult episodes during which we’ve done more blaming than planning. There have been times when I’ve honestly wondered if we could pull through.
The Case for Separate Bank Accounts
One of our fights led me to read articles from experts on how best to handle money in a committed relationship. Most of these people claimed that the only way to keep money quarrels from happening is to avoid having a joint bank account (or otherwise sharing finances).
Many bloggers and experts firmly believe that couples should keep money matters separate, whether they’re dating or married.
We’re talking about having separate bank accounts, splitting household needs and groceries evenly (or buying them independently), and taking care of debts based on who incurred them. It’s a popular viewpoint, especially among millennials who have long been taught to be independent with their finances or have watched their parents struggle through a divorce because of money.
Carrie Hartman, a divorced single mom, and her ex chose to keep their finances apart. “We did marriage counseling early on through our church, and even the priest said to have two different accounts set up for spending money! I couldn’t believe it. But we went along with it for the nine years we were married.”
The Downsides of Separate Bank Accounts
Hartman explains that separate finances worked for a short period, but when kids came along and it was time to buy their first house, clear differences began to emerge. “I made more money than he did, and I admit that I was kind of unreasonable about him putting up 50 percent of the down payment. When he said he didn’t have his share, I realized that he hadn’t been managing his money properly. He was badly in debt and I hadn’t even known!”
Hartman says that her ex’s bills were all sent to his office. However, she guesses that near the end of their relationship, he had managed to rack up more than $40,000 in consumer debt. Their dreams of buying a home were dashed, and the repo man was coming for their one joint purchase — their cars. And so Hartman, distraught over being deceived, decided to end their marriage.
Her story is an extreme case of separate finances gone wrong. There are plenty of other people out there who make such a financial arrangement work or find some middle ground. But there are also those who live the flip side of this — those who combine their incomes.
The Benefits of a Joint Bank Account
My husband and I are one of those couples who have joint finances. Our debts are combined, our money is in a joint bank account, and our names are on both of our checking accounts. We budget together, set aside money for our daughter’s school together, and even save pennies in a jar together. We do everything hand in hand.
Dave Ramsey, one of the most famous money gurus in America, often describes money and marriage as an essential partnership in which both individuals must be on the same page to be successful. Without the ability to work together and find common financial goals, a true marriage can’t exist.
Catherine Sebelius, a social worker and marriage counselor, agrees. “While I don’t ascribe to Ramsey’s views on money or marriage,” she says, “there’s something to be said about working together toward similar financial goals and buying into the relationship with your money.”
Sebelius goes on to say that combining finances is particularly beneficial in marriages that involve children or jointly owned property because each partner will require the other to get ahead or even to manage day-to-day expenses.
Sebelius describes married clients of hers who could not agree whether to enroll their children in private or public schools because of the cost. “I had them sit down and look at the numbers together,” she says. “It became clear that the husband earned just enough to make it work, but the wife couldn’t afford it with her smaller income. When they combined the two and reworked the budget, it was evident that private school was possible.”
Should You Have a Joint Bank Account?
The takeaway is that combining finances may not work for everyone, especially when there isn’t a legal relationship. However, there are many cases in which a joint bank account may be a solution instead of a roadblock.
For my husband and me, it’s all about centering our money around the concept of family. When everyone’s an equal player — particularly with money — the whole family benefits. We have clear heads and clear hearts, and we can say that, for richer or poorer, we are together on the financial front.