Should You Have Separate Accounts?

Money — the source of marital discord? Pshaw, says you — so long as your significant other manages money precisely the way you do.

Barring that, it’s probably safe to say that the complexities of coupled finances — disparities in salaries, differences in spending priorities, preferring offline to online banking — has occasionally impinged upon your happily-ever-after household.

Keeping all of your money matters completely separate seems the logical way to avoid conflict completely. It’s not. Nor is some generic formula for blending finances — or even copying the way your parents worked it all out. There is no one-size-fits-all solution.

“His,” “Hers,” “Ours,” Oy

I wish I had the answer to this classic coupled quandary, but the truth is that only you and your mate can find which account-management solution feels right for your coupling. Thankfully, there are just three main scenarios to try out:

• Joint checking and savings accounts. (“What’s mine is yours, darling.”)
• A joint account (checking or savings) as well as separate accounts. (“We’re all about letting each other have some space.”)
• Separate checking and savings accounts. (“Look how independent we are!”)

Here are the pros and cons of each. (For now, we’re just focusing on everyday money-management issues — checking/savings accounts and paying the bills.)

Joint checking and savings accounts: Do you and your significant other regularly talk money matters? You’d better, if you’re going to run your lives out of accounts that are “ours.” What’s nice about this setup is that it does indeed foster financial conversations. (If it doesn’t — and that causes strife in your relationship — perhaps this all-or-nothing approach isn’t right for you.) Completely merging your everyday money also makes joint expenses easy to handle and necessitates a lot less administrative hassle, since you’re not doubling up on account statements.

The downside of total money immersion is that it puts a lot of cooks in the kitchen — “my way or the highway” isn’t an option if you want to stay together. It also may place the burden of money management on one partner over another, which could make one partner feel resentful of the extra work, unless there’s a dishes/dog-walking chore tradeoff involved. It also means that there’s less privacy and independence, since everyone’s business is out in the open.

A combination of joint and separate accounts: For couples who dragged some outstanding debts into the marriage, such as credit card or student-loan debt, this setup may be ideal, particularly if one partner wants to tackle the pay-down on his or her own. A combination approach to accounts — some separate, some joint — can also alleviate some of the stress of distinctly separate expenses. It also exposes each of you to another money-management point of view — a “learning” opportunity, if you will.

The joint/separate approach does mean more up-front work — you have to figure out which expenses come out of the joint account and which ones don’t. If there’s a big disparity in your take-home salaries, but equality is important to you, consider having each of you contribute the same percentage of your income to the joint account.

Separate checking and savings accounts: In no way do separate accounts signify a lack of commitment to your relationship. They may indicate that you both like to do your own money math, though. Separate accounts do indeed give you the most autonomy of any setup — what’s yours is yours to manage as you see fit, and the same for your spouse. This approach may be necessary, particularly for spouses who are remarried and have other financial obligations, such as child support and alimony. You will, however, still get the eyeroll about whatever came in those department-store bags that you shoved to the bottom of the trash can.

The downside of keeping your cash in separate silos is the added hassle of paying for your shared expenses: Splitting fixed bills may not be a problem, but what about variable ones, such as a car transmission repair, or irregular savings goals for vacations, family gifts, and the like? When you’re a unit with two operating budgets, coming together can get as complicated as a multinational merger.

To-may-to, To-mah-to …

As complex as it may sound, coming to the perfect account-management setup is not a pass-fail task. If one option doesn’t work, just try a different one. Just remember that life is full of financial curveballs — new jobs, growing family, emptying nest, bad perms — each of which may require you to revisit the joint-vs.-separate account issue.