Bank Accounts: Joint or Separate?

Money is a common cause of marital discord. But keeping separate bank accounts may not be a quick fix.

When you marry or move in with someone, you must decide how you and your partner will handle your finances as a couple. Typically, one of the first questions you confront is whether or not you should merge your bank accounts, or keep separate accounts and split household expenses the way roommates often do.

Either method can succeed. What's most important is that you agree on an approach, stick to it and make it work -- at least until you make a joint decision to try something else. Many couples keep separate accounts at first, then opt for a joint account when they have children.

Here are some valid reasons you might choose to keep separate accounts:

• you both are used to spending and saving your money as you choose, and you don't want to give up your
• respective autonomy or privacy in this area (this is particularly common for people who have lived and worked on their own for a long time before pairing off)
• one of you is concerned about maintaining a credit rating of his/her own
• one of you has had a previous relationship with a spendthrift who left him or her saddled with debt, and doesn't want to risk having it happen again
• one or both of you has a large income and wants to reserve some of it, possibly to benefit children from a previous relationship

However, some people believe that willingness to share bank accounts and all financial assets and decisions is an indicator of commitment. Whetever your preferences are, make sure you and your partner are open about them and that any differences can be resolved early on.

How to do it
If you decide to maintain separate accounts, you can each deposit your pay into your personal account and transfer a pre-agree sum each month to a joint checking account that is used for household expenses such as food, mortgage, insurance, utilities and maintenance, plus shared hobbies, entertainment and holidays (and car payments, gas and maintenance, if you share a car).

Another common method is to deposit both paychecks into a joint account that's used to cover most expenses, including those listed above and personal expenses such as clothing, hair and personal care, medical and dental care, gifts and sundries. Each month, pre-agreed amounts are transferred from the joint account to each partner's personal account, for him or her to spend any way they like. Many couples that follow this method call the amount that goes into their personal accounts each month "allowance."

Quite often, separate bank accounts work just fine until a couple has children and one parent is at home for a period of time. With just one income coming in and more money going out each month in expenses, many people choose to merge their bank accounts and finances to maximize family resources and simplify keeping the books.