One of the more traditional aspects of marriage is the joining of the couple’s finances. Many couples might consider combining their bank accounts to be a part of sharing their assets and duties. There are several positives that could result from joining your bank accounts, and a sizeable percentage of married couples continue this practice.
However, many other couples find that keeping their bank accounts separate is a better choice.
Separate bank accounts permit both spouses to manage their finances independently. This can mean paying different bills each month, keeping your personal expenses separate, and saving for different goals. Separate accounts can prove extremely convenient in the event that the marriage ends, but can also be useful for day-to-day purposes. Despite the potential benefits, it is also important to consider the potential drawbacks of separate bank accounts when deciding on the financial arrangements for your marriage.
Divided Expenses
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Many couples can find that dividing their expenses is the most convenient way to handle their finances. You may find that having each spouse make his or her own personal purchases prevent arguments. You are able to divide bills, with one spouse paying the rent while another is responsible for utilities and car payments.
You or your spouse may have had a negative experience in the past, in which a partner took advantage of you financially. Dividing your expenses can mean you do not have any reason to become anxious that history will repeat itself.
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When sharing a household, many of the daily expenses are split evenly. If you have a mortgage or share a car, almost all of your large expenses are shared. In this case, you may have to transfer funds from one account to another on a monthly basis. If you pay for different expenses, one spouse might end up paying more than another, creating resentment. If one spouse earns significantly less but is still expected to meet half of all expenses from his or her account, he or she may be put under financial strain.
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If you or your spouse plan to take maternity or paternity leave, or to stay at home to raise your children, having a shared account could allow you to make this change more easily. When one spouse is dependent on the income of the other for a time, having access to that account can prevent an unequal power structure from developing.
Responsibility
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With separate accounts, each spouse is responsible for his or her own money. Many couples may find this can help to prevent conflict. With financial disagreements being one of the most common causes of marital arguments, lessening the risk could be worth it.
Each spouse has control over his or her bank account, retaining financial independence. This also means that one member of the household does not have undue power over the other. You can set up a method of communication that permits each spouse to view the other’s finances if you are concerned about accountability. Additionally, if the marriage does end, separate accounts can greatly simplify divorce proceedings.
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There may be one member who is much more knowledgeable about finances than the other. In these cases, it is in the best interests of the couple to have one spouse in charge of the finances. This involves a trust-based agreement, determining that the spouse who runs the bank accounts will not take advantage of his or her position. However, this could also mean the couple is able to split various domestic tasks depending on the strengths and abilities of each spouse, rather than automatically dividing everything by halves.
Credit and Taxes
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If either spouse has bad credit or is in debt, sharing your finances can negatively impact the other spouse, which affects the household as a whole. Keeping at least one good credit score is very valuable. In addition, if both spouses are paying toward one spouse’s debts, this can become a source of tension.
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With separate bank accounts, you can also file your taxes separately. While joint-filing has many advantages, the impact of one spouse’s financial issues on the other should also be considered. If your spouse has unreported income, for example, it affects you as well.
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If both spouses have strong credit scores, you can combine your accounts to increase this strength. This might be particularly useful if you plan to apply for a mortgage or another large loan in order to purchase a shared asset. If you are confident in the state of both spouses’ finances, filing your taxes jointly can be a major benefit. It is cheaper to file as a couple than separately, and you can also share certain deductions for greater savings.
Money Management
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If both spouses have very different methods of managing money, this quickly becomes a source of disagreement. One spouse may prefer to budget every expense at the start of the month, with no deviations. The other might keep his or her plans looser, perhaps using guideline amounts that change as required. Separate accounts allow each spouse to manage his or her money in the way that is most comfortable.
You can also work toward different monetary goals without conflict. One spouse might place his or her savings into a stationary retirement account, while the other chooses to invest and trade. Each spouse can do as he or she wants without needing to request permission.
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Although everyone has different money management styles, you or your spouse might find your style is not working. If you struggle more than your partner, you may benefit from him or her helping organize your finances. Shared financial goals can also be a positive aspect of your relationship. This could mean saving toward a joint retirement plan, a home, or another long-term target. Creating and discussing your plans is a way to connect with your partner. This is helpful if you feel you need to make any financially based lifestyle changes in order to reach your goals, as these decisions should be made jointly.
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