Monday, January 10, 2011

Should Couples Have Separate or Joint Accounts; Revisited

Back in Sept. I wrote a post concerning my views on a couple having separate or joint financial accounts. I stated that is what my wife and I had done and why. I always felt a little guilty that we were doing that. I was brought up that, for better or worse you combined your finances. All my friends and family have combined accounts, I am the only one with separate finances. 

I was reading a post over at GetRichSlowly.com and read how top-notch blogger J.D. Roth has his finances separate form his wifes. I thought if it makes sense to him why am I so concerned. 

Without all the cultural pressure of combining accounts and considering the relational pluses of having separate accounts, it makes sense in my life to have them separate. If you are someone who follows the work of Dave Ramsey, you know he says separate accounts are wrong. His reason for this is that if your keeping your account separate then your short circuiting a big part of the relationship. Having combined accounts gives you more ways to plan your lives together and foster more communication, resulting in a closer relationship.

For me in my first marriage, we combined are accounts. We were both in our early 20's, didn't have anything to lose, and we were fresh faced kids starting out in life. Little did we know someday all of it would be over. Fast forward to second wife. With remarriage, both parties already had established lives financially. Already established bank accounts, investments, and habits that were well entrenched. At that point combining financial styles and habits would be hard. 

The choice of having separate accounts, over a decade, has convinced me it was the right move. Having things separate reaps benefits everyday in the avoidance of disagreements. We both have strong opinions when it comes to finances. Also being a combined family, with children from previous marriages, it's only another reason we are doing the right thing.

If you are at the point where you must consider having your finances combined or separate, here's a list of things to think about.

The arguments for combining finances are:

  • If there is only one income, it doesn't make sense to have anything separate
  • One person is financially inept at handling money. Combining money would only be the practical thing to do.
  • You believe that joint finances are easier and economically make sense
  • It's morally wrong to keep them separate and it shows a distrust of your spouse.

The arguments against combining finances are:

  • You believe that with all the best intentions marriages fail, so whats  the point.
  • You both make the same amount of money. Then it's OK.
  • Your family has a tradition of separate finances.
  • It keeps the level of money fights to a minimum.

I can say I love my wife and I would trust her with everything I have. But I think keeping our finances separate has removed a point of contention and helped our marriage grow. Again it comes down to what's comfortable and right for you. When I want to give good advice to someone I think what would I tell my own children in the same situation. I would say be honest with your spouse and be honest with yourself in your feelings about money. 

2 comments:

  1. Great Post!
    Honest IS the best policy.
    I know many with combined accounts that one person or the other "hid" expenses. Still others where one person does all of the accounts and the other has NO idea that they are about to go under! The recession definitely made that more real for my family.
    For us- combined works. Early on he traveled and I needed to pay the bills. Now we have combined- but separate retirement accounts (which is the majority of our savings). It works because he is WAY more aggressive than I am with investing. I would probably have a heart attack if he was investing my retirement money. As we age and take money from those accounts- it will become combined again. We both have generous allowances- so we don't touch savings anyway.
    What ever works for you and yours. It does not seem to matter in the best marriages I know- some are joint in everything, others are separate.
    Some of the things Dave Ramsey says are a bit too" traditional".

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  2. Agree with you there! We've always maintained separate accounts. (We do have one joint account but that's mainly to do a quick transfer). Not that we don't trust each other, but this works best for us.

    For big ticket purchases, we pool money together. We don't need to know each others every little expense!

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