So you’ve had the money talk and realise that your plans and habits are in sync for the most part. Some time has passed and you tie the knot! And the question comes up…..should we have a joint account or keep our monies separate? Hmmmmmm seems like this money talk never ends……
Well just like the last discussion, there really is no right or wrong answer for this. There are different schools of taught on this subject, but we will look at both sides of the coin today.
Here are a few points to guide you in deciding whether you should have a joint account or keep your money separate in marriage:
Benefits of a joint account:
- Having a joint account can promote trust and open communication. A joint account means that both parties are fully aware of how much each party earns, saves and how much debt exists. While many may say that there should be no secrets in marriage, I have known many couples who do not want their spouse to know their financial standing, including their salary! Once there is a joint account where all funds are kept, there’s no hiding.
- A joint account makes it easier to track household expenses and makes budgeting easier (especially if funds are tight).
- A joint account ensures that in the event of an emergency (sickness or even death) both parties have access to all funds and bureaucracy with financial institutions/lawyers can be avoided.
Benefits of Separate accounts:
- Having separate accounts promotes autonomy and independence. Some people just don’t want to account to their partner for every dollar they spend. They enjoy the freedom that comes with managing their own money. Additionally, this may ensure that each party maintains some level of responsibility rather than depending solely on maybe one party to handle all the finances.
- Having separate accounts can foster more peace in the home/relationship because there isn’t the need to justify all spending to your partner.
- Separate accounts can protect family finances in the event of bad credit on one of the spouse’s part. This is why open, honest communication is so important in any relationship.
The key take away from all of this is that there is no one size fits all when it comes to managing money in the family. Not because your mother, best friend, pastor or whoever has a joint account, or manages their money separately means that you must do the same. Remember you and your partner already had the money talk, therefore you are well aware of each other’s spending habits, debt etc. This is the main factor to determine your final decision on what type of account should be maintained for your family.
Bonus tip: There is a happy medium in all of this. A joint account can be established to take care of bills and other house hold expenses while separate accounts can be maintained for saving and other personal expenses. With this approach an equal percentage of earnings can be saved jointly to take care of household needs. The equal percentage as opposed to an equal dollar value is fairer in the event that one spouse’s salary is larger than the other. Each person makes their fair contribution while maintaining some level of autonomy with their own account. Let me interject here though, even though separate accounts are maintained, it does not mean that the other party is oblivious to what is going on in the other account, or unaware of its existence. Not because you have your own account means you can spend irresponsibly, your partner and family obligations must always be considered.
Until next time…..Gerlan