Joint vs Separate Accounts for Married Couples

When you get married or enter into a serious relationship, one of the grown up things that you have to give consideration to is how you want to set up your financial arrangements. Money can be a cause of friction in relationships, even with the strongest of relationships, so it’s important that you reach agreement on an approach that is going to suit both of you best.

Having a joint checking/current account isn’t mandatory and isn’t automatically the best solution. Many couples continue to keep their accounts separate, even after taking their wedding vows. This article looks at the options that are open to couples and how to decide what’s best for you.

Option 1: Opt for a joint checking account to cover all bills:
The benefit of having just one account, into which both your incomes are lodged and all expenses taken from, is its simplicity. It is easy, at a glance, for either party to see how much money is available for everyday expenses.

It also aides transparency in a relationship. You can see what she’s spending money on and she can see what you’re spending money on. Of course, some might see this as a disadvantage too!

Another benefit is minimising checking account costs. Many checking accounts (and packaged current accounts in the UK) have a monthly subscription charge. By having just one account, you minimise these costs whilst still benefiting from any value-added features that the account offers.

Option 2: Keep your separate accounts and don’t have a joint account:
It’s perfectly possible for a married couple to keep their separate checking accounts. After all, this is how most dating couples operate and if it works perfectly well during that phase of a relationship, then there’s no reason why it can’t continue to work thereafter.

A benefit of this approach is that both parties will still feel comfortable with spending the money that they have earned. She doesn’t need to feel guilty about spending hundreds of dollars on shoes (or him on model cars) as she (and he) know it’s coming from their own account. When couples have a joint account, they may feel inhibited in spending money on things they enjoy and that make them happy.

A downside to this approach is that it does make budgeting more complex. You will need to agree a way in which to pay the bills. This may be a case of setting up direct debits from the account of the higher earner and then agreeing a monthly transfer of money from the other partner to cover their share.

Whether you choose to open a joint account or not will be a personal matter and will be influenced by your attitudes to money. Of course, the two options outlined in this article aren’t the only approaches you can take. You might decide to set up a joint account to cover bills and household expenses but also keep separate accounts for additional personal spending. This requires a bit more effort to set up and make sure that it runs smoothly but it can be done. I’ve also limited comments to checking/current accounts. Another option is to go for a joint savings account. This is what my fiance and I have done to cover the expenses of our wedding. A benefit of this is that you earn interest on the money and there’s no monthly service charge and no prospect of incurring overdraft charges!