Why We Have (Some) Separate Bank Accounts

One of the questions people frequently ask newly weds is how they are handling their money. Do you have totally joined finances? Do you keep separate bank accounts? I definitely get this question more often than I’d anticipated. If I had to guess, this blog probably has sparked more questions than most people would get. Handling money as a couple is a very personal situation. What works for some might not work for everyone. Talking about money – and other important topics – before getting married is critical. Doing so will make sure that you are working together and not sabotaging each other’s goals.

Our Money Goals

The most important part of our decision-making process was to understand the goals we had. Did we want to buy a house? Did we want to travel? What age did we want to retire at? Is rental property a possibility? To what extreme should we go to save money?

There are tons of different goals that can vary wildly from person to person. Even if two people have other shared interests, it’s possible to differ greatly from each other when it comes to how to deploy the money that’s earned. Kristin and I knew from the get-go that having two people working toward a shared goal together is a powerful thing. For that reason, we decided that having a shared money pool would help us achieve our goals more effectively.

Joint Bank Accounts

Disclaimer: This has not yet actually been switched over. We’re waiting until we close on the house, so as to not complicate the mortgage application process.

We will have most of our bank accounts merged. Doing so helps us reach goals faster if we pool resources. We’ve talked about what those goals look like. Things like how big of an Emergency Fund we want, and if we’re saving up for a new car. Some of those goals have changed since we got married even a month ago.

Others are longer-term goals like taxable investment accounts, paying the house off early, and working together to save for retirement. By nature these are individual accounts, but knowing that it’s our money means that we will talk about what retirement means if we could have one person stop working.

For the most part this works very well. We both can see what’s going on with our money, and how we’re standing.

It’s not all perfect. We have some shared expenses that we each wouldn’t have in our own spending. We pay for cable TV right now (girl’s gotta get her Bravo fix in). I rarely watch TV, and what I do watch I’d be content to just watch on Netflix or Amazon Prime. Still, it’s just easier for shared expenses and shared goals.

Separate Bank Accounts

Even though most of our money is combined, we do have some separate accounts. We keep these at totally different banks, in fact. When people hear that, I’ve gotten mixed reactions. Some folks have a similar setup. Others, however, see this as an opportunity for not communicating about expenses or the like. That is not the case.

We’ve specifically set up separate bank accounts for our fun money. This is money that each of us get to spend freely on whatever we want, no judgement from the other. Kristin will save up and buy herself a purse one day. I will roll my eyes, and be thankful that she spent months saving her fun money and the purchase didn’t hinder our shared goals. I, on the other hand, will buy a new video game or two and other generally nerdy things.

Having separate bank accounts where we will each have debit cards gives us the flexibility to spend without consulting the other. Since we’ve agreed upon how much money we’ll allocate toward this ‘fun’ account each month, we know the impact it has on our shared goals (for the record, it’s less than 3% of our take-home pay).

Having everything in shared accounts works out great for some people. For us, I think we both know that some of the decisions we’d make financially would drive the other one mad. By having a small amount each month we reach a compromise where each person is happy.

You Do You.

Whether you like or hate the idea of combined finances, I’m not here to tell you one way is right or wrong. I read an article that insisted that separate bank accounts are an absolute must for a happy marriage. It argued that it gives each individual a sense of purpose and contribution. The comments in that article were riddled with married individuals with joined bank accounts and happy 30+ year marriages.

Clearly what works for Kristin and me may not work for your situation. That’s okay – I’m not here to tell you what to do, just to explain what we’re doing and why.

Communicate and Evolve

The most important things when it come to this decision will be to communicate about it and change as needed. Today we think that having mostly shared finances with a couple separate accounts will work out the best. Down the road, we may get rid of the separate accounts. Going the opposite way – to totally separate – would undoubtedly be a messier task, and one we (obviously) don’t anticipate.

These conversations aren’t one-and-done. As your financial situation changes, your goals will likely change as well. Life happens and gets in the way, and what worked for you yesterday might not work for you today. The best advice I can give is to be open and honest, and communicate and evolve together to your present situation and what you want out of your future.

Question:

If you’re married, do you have (any) separate bank accounts? If you aren’t – any hard rules on what you might want in the future?

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10 Comments

  1. At the end of the day, it’s all about doing what works best for you. So don’t worry about other people’s reactions if you’re happy with your method. Personally I keep everything joint. The reason is so there are no “surprises” with the fun expenses. My view is that we need to know about fun expenses, and if we’re judging each other that harshly on fun expenses, we need to examine our relationship and why we’re reacting that way. For me, separate accounts is a Bandaid that wouldn’t fix the actual problem, which is judging your spouse.

    1. That’s a great perspective to have, and one I fully expect we’ll get to at some point! This works for us, and like you said we’re both happy so we’ll stick with it. 🙂

  2. All of our bank accounts are joint now that we are married, but I have one credit card that my husband is not on and he added me as a “user” to his Amex card so I can only see my own expenses not his. The point of this is so that we can still buy gifts for each other for occasions without the other one seeing where it was purchased before they receive it.

    We do a monthly budgeting review together, so the costs eventually come out, but it’s nice to have a way to surprise each other still!

    1. Oh gifts are a great call – and honestly not even one I had thought of personally! Kristin did bring that up though. 🙂

      Thanks for stopping by Courtney!

  3. We have no separate accounts. I actually think this provided my wife greater security because it gave her total visibility of every dollar we had. She was a stay at home mom prior to my early retirement and being able to see everything we owned let her see when she became FI with or without me. Fortunately she decided to keep her starter husband and is still tolerating me years later. Of course only time will tell, we’ve only been married 39 years.

    1. Haha, that’s a long time for a starter husband!

      Sounds like that situation worked out well. I do like knowing where stuff is going, but if I just know we have a couple hundred each month that we don’t care about, I’m fine with that. Auto transfer makes it easier.

  4. What works for one couple might not work for others 🙂 As a newly married individual (less than one year!) we have really happy with the set up we have so far (which is joint accounts and separate accounts). My hubby is a bit older than me (not technically robbing the cradle I think though lol) and we did a prenup so the joint account thing works for us. I think the most common scenario for most people is to not have separate accounts and do things completely jointly.

    1. As long as both people are happy, that’s what it’s all about!

      It sounds like a lot of folks do things completely jointly, you’re right, but it seems that there are a fair amount of people who adamantly speak up about needing to have separate accounts. I’m of the same mindset with you – what works for one couple might not work for others!

      Thanks for stopping by!

  5. Been married sixteen years and always had separate accounts. It has just worked better for us this way as we didn’t really have the need to go joint even though we share expenses.

    Main thing is to have a good and open communication and make financial decisions together.

    1. Awesome! 16 years is definitely a long time, no way that’d work if there wasn’t good communication and trust 🙂

      Thanks for stopping in!

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