Separate or Joint? Mine or Yours?

Want to know how to haggle? Then please make sure to check out my staff writer post at Beating Broke today, The Golden Rules of Haggling!

This post was featured in Carnival Of Personal Finance #288.

In my family we always had a common pot of money.  We didn’t have a bank account but we would put money in a big brown envelope. Yes, I still remember the color! My grandmother was in charge of it, and she would do all the necessary budgeting. If I needed money for school lunch, I’d have to ask her for an allowance. If my mother needed a new coat, my grandmother would decide when the family budget could afford it. I grew up with one brown envelope, or I’d rather say one “joint” account.

Years later, when Beaker and I moved in together, we opened one checking account and one savings account, with both of our names on the accounts. I did not question our decision. Neither did Beaker. It seemed natural for us to combine our finances and move towards our common financial goal – building our lives together.

My friends however questioned every step of this process. That’s when I discovered that some people draw a line when it comes to finances, opting to keep separate accounts. My friend, the one who hides purchases in the trunk, told me that separate accounts are necessary for separate spending. “There is our money, and there is my money,” she said. Understandably, she is very protective of her savings. Probably because having separate accounts prevents arguments about overspending.

I understand that people want to preserve what they had, what they have accumulated before they became a couple or a family. Having separate accounts gives some level of comfort and peace of mind knowing that “what was mine, remains mine.” Especially if you were financially established, owned some assets and investments, you could decide that having separate accounts works better for you. However, I believe thathaving separate accounts also discourages the development of shared financial goals.

Neither Beaker nor I had accumulated assets, houses and investments when we decided to start our lives together. We brought our debt into this relationship, so the natural choice was to have joint accounts to pay the bills, save and plan our financial future. We decided to share everything: our debts, our bills, our paychecks. We decided to share our lives.

I think that in the end, it all comes down to a question of trust. Marriages are built on trust and commitment, right? It is all about sharing, isn’t it? So, why do we need separate accounts? Is it because we don’t trust each other completely? Is it because we think that the other person will go out and spend our money? Or is it because we want to preserve a piece of us, we used to have before we were committed? Something that would show us that we have not totally dissolved ourselves into the relationship?

I am a huge believer in joint accounts because they create a concept of  “our” instead of “mine.” They reinforce trust and commitment, and ultimately they create a sense that “ we are in this together.” Isn’t that what marriage is all about?

30 thoughts on “Separate or Joint? Mine or Yours?

  1. Jolyn@Budgets are the New Black

    I totally agree: finances are the window into the marital soul, IMO. We’ve been married 16 years and have always had joint accounts. It hasn’t always been pretty (understatement) but how we are communicating on our finances almost always directly correlates on how we are communicating in our relationship as a whole. Joint finances can provide an opportunity to become closer as a couple.

    1. Aloysa

      I agree. I’ve seen couples with separate accounts, separate friends and, in the end, separate lives.

  2. LifeAndMyFinances

    My wife and I have one joint checking account. I think it might create more arguments in the beginning because we both have different spending habits, but after a few months, it really sparks compromise and communication. We are both very happy with our finances and our future goals. Why not live them out together?

    1. Aloysa

      My husband and I have very different spending habits. He is a saver and I am a spender. Somehow, it always works out.

  3. The Grouch

    Call me old fashioned, but unless you are married I think money should be separated. And if you are married it should be joint as long as the partners have similar spending habits and can trust each other. If they don’t trust each other, the marriage isn’t going to last anyway.

    1. Aloysa

      We had a joint account as soon as we moved in together. It all worked out fine, even though our spending habits are very different. I believe it all comes down to the issue of trust.

  4. Moneycone

    We’ve always had separate accounts (except one that is joint to facilitate transfer). Not because of anything – just that we never thought too much about it!

    1. Aloysa

      Interesting… So, how do you account for your spending when you go on vaccation? Or when you buy groceries?

  5. Crystal

    Since my husband and I make all our decisions together and all of our goals are jointly attained, we also have joint accounts. It was probably easier for us to do this when we got married the week after college than it is for older couples that already had separate financial lives for a while…

    1. Aloysa

      I guess when you are older and have assets, investments and savings, it would be more diffuclt to combine finances. Much easier when you are young, don’t have much except plans, hopes and expectations.

  6. Suba @ Wealth Informatics

    We have separate retirement (401k, ROTH) and checking accounts. And we have a lot of goal accounts (we have one account for each of our goal – house downpayment, vacation, etc) and a few accounts for irregular bills (insurance, car maintenance, etc). Most of that accounts are in my name, though we view them as joint accounts. Basically, we have joint accounts for everything, except a separate account for our spending money. It might be confusing to explain, it works better for us. I have been meaning to write a post explaining out methods, just never get to it. Thanks for the reminder, I will do it today.

    1. Aloysa

      Wow… seems like you have a lot of goal accounts. We also have separate 401K. We have only two goal accounts – emergency and pet account. I think pet account can qualify as an emergency. Sort of… I would love to have a vacation account, but it will have to wait till better times.

  7. Jean Paul

    At the moment I am single but there is no way I will have a joint account with all my money in it. It’s just not gonna happen!

    Sharing is good but a relationship is still made of two different people. For me it’s not an issue of trust, it’s more like what’s the point?

    I wouldn’t mind having an extra joint account. But I won’t give anybody direct access to my fortune!

    1. Sandy @ yesiamcheap

      “It’s more like what’s the point?” I don’t know. This is so tough but I think of what’s going on in the world right now. If someone is laid off does the working partner’s money stay “their” money and the non-working partner is then reduced to what? And what about huge pay disparities in a marriage and you are both paying into bills of the household? How fair is it to the partner that earns less? Or an easier scenario, wife takes time off after having a baby. Does she not have access to fund because she is temporarily not working. I see the benefits of both methods but I see the pitfalls as well.

    2. Aloysa

      I think Sandy summarized everything better than I could do it. “What’s the point?” – what’s the point in marriage then?

  8. Everyday Tips

    We got married a week out of college, so we didn’t “bring” anything to the marriage. Well, I brought a ton of student loan debt…

    Everything we have is in joint accounts. I never thought to do differently. My husband and I trust each other, and he needs something, he gets it. He doesn’t need to keep a separate account and make secret purchases.

    1. Aloysa

      I’ve heard that before – we need seperate accounts so that he can buy me Xmas, birthday, Valentine’s presents and surprise me. Why can’t you use a joint account and still surprise me?

  9. Jessica07

    I absolutely agree with your thinking here. While everyone’s circumstances are different, I think there should be a limit to the “prepare for the worst, but hope for the best” outlook in marriages. Either you plan to make it work, or you plan an escape route. The latter doesn’t necessarily show financial sense as much as it does distrust.

    1. Aloysa

      One of my friends always plans for an escape route. This is one of the reasons she has two secret accounts her boyfriend doesn’t know about.

  10. Kellen

    My parents always had joint accounts, so for me that’s the ideal.

    I don’t know if I could trust someone else enough to have a joint account, but at the same time, I hope that if I get married, I am hitched to a person that I CAN trust enough.

    It almost seems simpler to look back a few years when women were expected to stay at home, and men worked. It’s a no brainer that you can’t have separate accounts then. But in some of those cases, the men were pretty controlling about their earnings – some men would only let their wives have access to a certain amount of money each week.

    In my family, my mom only worked part time while us kids were growing up, so my father always earned the bulk of the income. However, my mom took care of the budgeting and paying the bills. Dad doesn’t spend too much, so he was happy to go along with whatever budget she set.

    That might be hard to recreate for me, since I’m not sure I’d want to have to manage all the paperwork alone, but I wouldn’t want to step back and let someone else handle it without my knowing what’s going on. Happy medium?

    1. Aloysa

      I manage all our budget and all our accounts. Beaker, my husband, is totally okay with it. We both work and don’t have kids. It works out just fine for us. I budget , we plan and then we try to achieve our goals together.

  11. retirebyforty

    We have mostly joint saving, checking, credit, and mortgage. Separate 401k, IRA, and brown envelopes.
    I think it’s crucial for two people to work toward similar financial goal. It is so much easier to work together rather than fight each other. That’s what marriage is all about, yeap!

    1. Aloysa

      Brown envelopes, huh? We need to add to our finances brown envelopes. Usually we just spend whatever, we don’t have allowances. But lately I was thinking to start having some monthly allowances and see how it goes. Who spends them faster… LOL I know the answer to this.

  12. Melissa

    I was like you. My husband and I had joint accounts from the beginning and still do. I didn’t realize until a few years ago how common it is to have separate accounts.

    If I married someone who spent any money that they came in possession of, I would probably have separate accounts. (Actually, I probably wouldn’t marry that person though!) My cousin had filed bankruptcy before he got married, so when he got married he and his wife had separate accounts. It makes sense to me in that case.

    1. Aloysa

      Well, if a person goes on a spending sprees without any consideration or responsibility, then it all comes down to the question of trust. Can you really trust this person? I don’t know… It can be tough…

  13. Sustainable PF

    We joined our finances when Mrs. SPF was still in university. For the last 3 years we have avoided having to figure out who pays what proportion of any given expense, and it has been bliss.

  14. Jim Smith - UHNW

    I found it hard when we first had a joint bank account. I had always tracked my cash pretty closely, whereas my wife didn’t. But the wife insisted – her thoery was that we were married and therefore it was one in all in. So we shared everything. I think it really helped cement the relationship (and now marriage). I still track our combined spending and my wife has learned to remember where she spent the cash.

    1. Aloysa

      It is exactly my point – we are in this together, we share our lives, our responsibilities, hopes, plans and finances!

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