Are you sure there isn’t some “interesting story” bias going on there? “I went from being a millionaire to living on the street because of my joint check account” is a far more likely story than “I had a join check account for twenty years … and nothing happened”. If you totaled all my car travel stories you would think every trip I take involves a wreck
As to joint versus separate, there is a more important underlying issue that you need to talk honestly about which will determine what is right for you. You both need to understand each others long term goals and short term spending / saving habits.
Using my marriage as an example, we are both naturally very frugal people who earn similar wages. We probably save 60% of our income, and typically don’t need to buy a lot of expensive stuff. Our spending habits are very similar, although I have a perverse enjoyment of administration (paying bills, doing taxes, etc) that my wife does not share. In our case all our accounts are joint, and we both have access to everything. I tend to manage things on a day to day basis, since I am more naturally inclined to do so. This is a very natural fit for our personalities and habits.
Other people in the thread indicate that they are in relationships where people have very different habits (more spending, less precise account management, etc) that may drive the other party nuts. For me, I don’t think I could deal with that very well. Other people seem to have a system for managing this, often resulting in separate accounts. While not for me, that sounds perfectly fine, as long as everyone is on the same page regarding the situation and finds it satisfactory.
That you already disagree on separate versus joint may be a symptom of a larger philosophical difference regarding marriage and finance. I think it is extremely important to get that ironed out before you get married, otherwise you may be in for a world of hurt.
I’m having the same reaction to these statements - money is such a big issue, that if you don’t trust your spouse with money, then I’m not sure how separate accounts are going to truly solve this issue. I’d think it make it worse, since they would have nobody else looking over their shoulder in order to make sure they were behaving responsibly, actually. At least with a joint checking account, the responsible one could keep the irresponsible one in check, if necessary.
I have to say I also don’t get the “separate accounts give you an out if you get divorced” attitude I’m seeing, too. It’s really not something we were thinking about when we decided to do our finances this way, not remotely. I’m pretty sure that divorce would be devestating and difficult even with separate accounts.
I retract my “wrongo.” However, most people who have separate accounts still seem to have a joint account for joint bills. Do you oppose that also? That could be just as screwed up as a single joint account, and, unless you have tons of money, that would have most of the cash flow anyway?
I’m with Anne Neville on the benefit of a joint account for check bouncing issues. I’ve hidden some money in our checking account to guard against mistakes which might make us think we have more money than we actually do. It has worked out very well, and has reduced stress quite a bit. I know there are overdraft protection programs, and I think we have that, but I don’t believe in paying one cent more in fees than absolutely necessary (which should be 0.)
I think the point to draw from all of the discussions of trust issues is that where there is trust, either arrangement can work, and where trust is lacking, neither arrangement will be comfortable.
My wife and I each have our own personal account, a joint account and a joint credit card.
Each month we each sent $x amount to the joint account and $x amount to the joint credit card based on rough budgets we have established. The remaining funds in our personal accounts are ours to spend or save as we wish.
It is actually very simple and since we rarely spend the rough budgets, we always have a slush fund in our joint account which has worked out great for vacations, etc or as an emergency fund.
We got married later in life (mid 40’s) and I had some bills I should be totally responsible for (i.e. Alimony to the ex wife) and this simple system has worked out fantastic for us.
Now with my ex-wife–we had joint accounts–and I HATED it. She hated to walk around with cash and thus would use her debit card for $1.80 purchases or even worse, write checks for that amount. Drove me crazy to try and balance the checkbook. And she couldn’t do it as she was just frankly totally incompetent at bookeeping.
With my current wife–Groceries, Gas, dinner, etc all go on the joint credit card to be split at the end of the month and paid off in full. If my wife wants to be some nice jewelry (her vice!) or I want some new shop equipment–then we each just buy that out of our own personal accounts. No muss, no fuss. I also like it that when my wife takes me out on my birthday or gets me a present–SHE has purchased it for me and it doesn’t feel like I am buying my own birthday, etc.
But really to each their own is what I always say–I have seen these threads in the past, and they always seem to fall into the two camps. But whatever works for you and your spouse is the critical thing.
If you’re going to have a joint account, this would be the way to do it. As long as both parties know exactly what transactions are going to occur and when, it’s easy enough to avoid problems day-to-day. This still leaves the potential of a scorned spouse closing the “bill” account the day before the car-payment-that’s-in-Other-Spouse’s-name-only is debited and taking all the jointly-owned money, but I understand why someone in a happy relationship might not want to take active steps to safeguard against such things (SEE: prenups and arguments against same).
Oh, you absolutely shouldn’t have to pay fees for overdraft protection. There are a number of ways to set up similar protection depending that don’t involve joint accounts (the specifics depend on your bank), but I don’t want to hijack the thread any more than I already have…feel free to PM me if you care to know more.
I have a question for those of you who are in a relationship where you keep separate accounts because you have wildly different spending habits (ie one spends like crazy, the other squirrels away).
What does the spouse with all of the extra savings do with the extra savings? Do you/they spend it on big ticket items for themselves? Consider it the “emergency fund”? My brain is having a huge disconnect between the idea that both spouses contribute financially equally while one has a lot more money on hand than the other. I think I am having trouble with the question “to what end?”
For the record, my parents have been married 35 years and have the same financial setup as Driver8. Everything is a joint account and dad pays the bills because he honestly enjoys it. Mom doesn’t get an “allowance” so much as dad discreetly checks to see that her wallet is full on a regular basis, or mom makes sure she takes a little extra cash from his wallet before she leaves the house. They are both frugal but mom enjoys shopping more than dad, and dad is the sort of old fella that likes to both tip heavily and complain about how he has no money.
I want to clarify that the “kids” account is not legally put in their name. It’s just an accounting device.
And this thinking is part of a larger idea about “using” multiple bank accounts as an accounting organization device.
At big companies, you have elaborate accounting software that lets your create “groupings” of expenditures/expenses. These are called “ledger accounts” and “cost centers.” Most households (including mine) do not use software for “home ledger accounts” or “virtual accounts” because it would be overkill. (I guess Quicken sorta emulates this functionality but I don’t like it so it’s a moot point.)
So in the big picture, I create multiple “ledger accounts” by creating multiple bank accounts. The “bank” acts as my “management software” for creating groupings of money.
The 3 main “ledger accounts” are:
personal discretionary account (separate)
kids account / or big life goals fund account (joint)
household (joint)
This approach has nothing to do with trust / honesty / information hiding or any of that nonsense.
Let me offer a completely opposite perspective on separate accounts. To me, a woman that has a separate account and manages it well shows maturity and independence of mind. These attributes are “sexy” to me. The woman is not staying in the marriage because a big factor is the joint bank account. She has her own money – her own autonomy. Autonomy is sexy. To her, the joint account is nothing more than administrative convenience for paying bills. The “jointness” of a particular bank account has nothing to do with marriage commitment or sanctity of the vows or authenticity of love.
(However, I have done some informal surveys of guys and it does not seem like a woman’s independence is a big priority in choosing a wife. I may be in the minority with this view.)
Anyways, the idea that people gauge a marriage by assessing whether the bank account is separate or joint is very petty and narrow-minded.
If the symbolism is important to her don’t make the mistake of discounting her feelings on this as silly. Instead, why not offer to take care of all the bookkeeping duties on the condition that all receipts and stuff get turned over to you so you don’t go crazy. You just need a system in place. We use Microsoft Money to manage our accounts and all receipts for bank transactions and debit card purchases have a specific place in the office were they sit until I “do the bills,” which is usually every week or two at the most. I don’t think we’ve ever had a problem with her not getting me receipts. We also take the time to discuss our financial goals and the state of our accounts and neither of us really has the habit or need to go on big spending sprees, so that probably makes things easier.
What’s the alternative? If you both have a separate account and then a joint account for bills, you’ll probably end up having to manage the joint account (for your own sanity) and then you’ll have just as much work, if not more.
That is exactly the point I was tip-toeing around in my post. You just need to talk it out and work it out. Either way (although in this thread several options for managing finances have emerged) will work if there is trust and a common understanding of what your common goals and expectations as a couple are. The rest is just - procedure.
While it is true the OP never mentioned trust issues, in my post I thought I would address why “classically” some people might see separate accounts as unfavorable, unromantic or what not. Much like a pre-nup. Most people would agree that a pre-nup in many cases makes sense, but nonetheless, many people find them uncomfortable, etc.
We have seperate accounts, purely in the interests of keeping track of our money; we are too busy to have meetings about what got spent on what. How do you people with joint accounts ever do your bookkeeping? It would drive me nuts not knowing what the stuff in my statement referred to.
Right now my wife is out of work because of the economic situation, and I’m transfering a certain amount each month into her account on top of a bunch of other automatic transactions … this just makes the accounting easier. Obviously if she needs more cash for anything, I just transfer more to cover it.
We regard all of the money as “our” money, it is just that only one person has control over particular accounts (for example, she has control over our investments because she knows more about investing). It is purely a matter of efficiency.
THANK YOU. I totally don’t get it either – why do people think that we have separate accounts because we each want to keep one foot out the door?? That’s 100% the opposite of reality. We’ve been married for nearly 20 years, quite happily, and looking forward to at least 20 more. But because we each have our own checking account, we’re really just “dating” – WTF?
Then again, I’ve had people ask me, “Don’t you love your husband enough to take his last name?” Not enough :rolleyes: in the world for that one.
We built a new house, and a lot of my surplus was sent toward furniture. Which was fine, I could have waited and made it a joint expense, but I wanted furniture for the unfurnished rooms.
I think the truth is no matter how you do it, its likely that one spouse will contribute more and one spouse (maybe the same spouse, maybe a different spouse) will spend more on themselves and their “blow money.” There are three scenarios - one joint account - which in my experience, is best with similar money styles, really good communication skills, and two people who don’t engage in tit for tat (or alternatively, enough cash that you don’t worry about it). One joint account and two allowance accounts - which gives each person control over some money but also creates a shared resource pool - but often the ‘saver’ in the relationship will be sharing ‘their’ resources at some point with the spender (my sister took her husband to Europe on her saved allowance - he would spend every penny of his), or two accounts where one person either writes checks to the other for household expenses or the bills are divvy’d up (you pay the electricity, I pay the phone and cable). That is probably the one least likely to involve an “unfair” distribution of resources, but it always seems a little like roommates who have sex rather than people who are married to me (as someone who started their marriage with moving in on the first date and having him pay me for his living expenses).
For us, it’s simple: I handle the vast majority of the finances in our household. I pay all the standard bills, and most of the irregular ones. Once in a while my wife will write a check for a special occasion, but she always tells me when she does. As for cash, once every few weeks she’ll take out some money from the ATM. Usually she’ll let me know, but if she doesn’t I check my bank account online regularly, so I see it very quickly.
For normal everyday shopping she uses a credit card, which I pay in full as soon as I get the statement every month.
It works for us: She hates dealing with money and I don’t mind it at all. I trust that she never spends more than we can afford. We always discuss if she wants to buy anything really expensive.
We, too, have Yours-Mine-Ours accounts, and all the household bills are set up for autopay from Ours. Every January we review finances and decide what percentage of both checks to have automatically deposited in each account.
We regularly switch off who has to go into the online banking to adjust the monthly payments to the actual amount due. In order to do this, we need to know each other’s social security numbers and passwords for financial transaction. I think that shows more commitment than a single joint account.
We don’t think of it as my money and his money. It’s “our” money and we pay “our” bills. Since Ivylad acknowledges that I’m better at saving money, I’m responsible for the savings account, even though it’s joint. He’ll give me money from time to time, and I will show him regularly how much money is in there. I also keep a separate spreadsheet, since what is in our savings account is not all an emergency fund, which right now is kept at $1500. We have “buckets,” money for vet bills, car repair, home repair, and other incidentals. Right now, our biggest chunk is for our Key West vacation. After we get back I’ll start saving up for Christmas.
We have had a lot less arguments over money (also been married, like Scarlett, for 20 years) since we set up separate accounts.
Are you asking what is the purpose of saving? If one spouse puts money into his or her bank account that doesn’t mean that that person now owns that money free and clear.
As I said, my wife pays almost all of the bills and I take care of saving and the big ticket items. I am the ant - she is the grasshopper and we find it easier to control the outflow if she pays the bills out of her paycheck and I do the saving. I like to spend the “extra savings” on call girls and liqueur - unfortunately, she would probably notice that sort of thing so I have to get my pleasure by feeding my inner Scrooge. The extra gets saved. When it comes time to buy a car or pay for something unexpected I am comfortable because I know we have the means and she is glad to have that reserve she never knew about. We both get our way in a sense.
Of course, the whole system involves a lot of trust. She has to trust that I am not stashing away cash for my own purposes and I have to trust that she isn’t overdrawing the credit cards so I’m not so sure this method would work well if we were having money or trust problems. In the end it’s our money, and debt, together though.
An interesting side effect of separate bill paying is that I no longer have any perspective on how much some things cost. The last time I paid an electric bill it was probably $25 (for a month). If I saw a bill now I would probably become that dad that follows the kids around the house, turning off lights. Clothes for teenagers? I don’t even want to know how much she spends. She likes to dress nicely and she likes her kids to look good. I like them all to look good too but I really don’t “get” shopping so I leave that to the expert.
We’ve been married only 2.5 years and my husband wanted separate accounts, which is what his parents apparently did. But it felt very foreign to me. When we out to dinner and had to decide who was paying for it, it felt like we weren’t even married, just dating or something. And he forgot a few times to pay the bills that were designated as “his” from his money. So then I had to spend even more of “my” money to cover our household expenses. It just didn’t really work so well for us. Now we have joint accounts and we talk about the bills together but I am usually the one that does the actual paying of them.
