When my husband and I got married, we followed the example of both sets of our parents and signed up for a joint checking account. We cancelled all the bank accounts that we had in our single days in favor of a new one at a new bank that had better rates and better incentives.
This worked out really well during our first two and a half years of marriage. We agreed that if either person was going to spend more than $50.00 on a single item, we would consult the other one first. We paid for our groceries, our bills, our dates, and our household items all from the same place. This also made it easier for me as the person in charge of the day-to-day finances to keep track of expenses.
As time went on, we opened other accounts for specific savings goals, but we both still had access to everything. Yet just recently, my husband brought up an interesting point: It’s difficult for him to purchase gifts for me or plan surprises because I see everything that happens in our accounts. Many people would suggest that he put his purchases on a credit card, but due to his extremely busy study schedule, I also am in charge of all credit card payments and ensuring there are no mistakes and nothing we missed. Additionally, he wants to purchase items for himself if he sees a shirt he likes or wants to grab a bite to eat with friends without feeling like it came out of a joint entertainment/miscellaneous category on our budget sheet.
This conversation with him led me to consider the pros and cons of a joint checking account. The world is changing after all and perhaps the old rules don’t apply anymore. I’m always open to making our finances more streamlined and easier to deal with on a day-to-day basis, so here’s what I came up with in terms of pros and cons for a joint bank account:
Pros of a Joint Bank Account
- It’s easier to keep track of all finances and create an accurate budget.
- It builds a sense of commitment, knowing all of your income is in the same pot.
- When both people have access to the same account, you can keep each other accountable by only purchasing what you can afford.
Cons of a Joint Bank Account
- If your partner has had financial trouble in the past or is not adept at keeping up with finances, they could overdraft, causing you overdraft fees and possibly your financial reputation.
- As stated previously, you might not be able to purchase gifts for the other person without them knowing where you bought it and how much you spent on it.
- Should something go wrong with the account, like identity theft or an unauthorized charge, the account could be frozen and you could both be out of luck for several weeks. (That is why you should always have more than one account that you can access.)
- Lastly, no one wants to think about this, but in the case of divorce, it would be much more difficult to untangle finances in a joint account.
Of course, there are many more reasons why some couples may choose to forgo or open a joint checking account. External issues like children from another marriage, previous financial hardship, or frequent business trips and expenses are all valid reasons for why a couple might want to keep their finances separate.
As for us, we’ve decided to open up a high yield savings account just for my husband. A certain amount will be placed there every month so that he can use it for himself or for gifts. I will still use our joint account for purchases, since I am typically the person who will be checking it and utilizing it. I’m happy with this decision, and I think it’s important to always be open to change when it comes to money and marriage.
Do you and your significant other have a joint checking account? Or, are you against them all together?
This might also be a discussion about having a set amount of cash to each partner for guilt-free and oversight-free spending. I’m not sure the element of surprise in gifting is enough to warrant another account, but it is important that you are discussing the pitfalls you have encountered.
For a few years of our marriage we maintained separate accounts and bills, but we made no progress until we combined finances and efforts.
TOTALLY against separate accounts. When you become one everything should fall under that-including spending. My husband, owner of FreeMoneyWisdom, and I have joint accounts. However, when wanting to spend money for a surprise-take out extra cash. OR…..if both partners are working then instead of cashing the entire check take out X amount and set it aside. There isn’t a need for separate accounts. There are creative ways of making sure your husband/wife does not know what you are spending or find out about the surprise. And as for divorce….why would one set themselves up for a divorce? There seems to me to be too many loopholes out there in the 21st century to make divorce far too easy; separating finances seem to be just another.