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Being in a relationship usually involves sharing mutual costs. Couples, both married and unmarried, have to decide if they want to keep their finances separate or use a joint checking account. This question is even more important when one individual comes to the relationship with more earnings, savings, assets or debts. Some couples choose to merge their bank accounts, while others prefer to keep things separate.
There are pros and cons to joint married bank accounts—and often, some combination of the two might be best. Ultimately, each couple should understand the extent of what it means to combine finances and decide if it’s the best approach for them.
Pros of using a joint bank account
A joint bank account is one that two people open together. Both people have equal access to the account. As a result, both individuals can deposit or withdraw money from this account whenever they see fit. Note that you don’t have to be married to open a joint bank account together.
There are several positives of using a joint bank account as a couple:
Ease of use
Most couples are going to have shared expenses. Even if you don’t split things 50/50 (many couples split based on respective incomes), there will be items or experiences you both want to contribute to financially. A joint account is a convenient and easy way to pay these shared costs, rather than constantly asking each other for money. Additionally, a joint account allows easy tracking of how much you’ve been spending and contributing as a couple, rather than inspecting your individual budgets.
Accessibility
No one wants to think about their partner being hurt, but it can happen. A joint account means you’ll have access to your funds if your partner is hospitalized, passes away, is unable to respond while traveling or is otherwise incapacitated.
Increased equality and trust
A relationship is about trust and communication. It’s only fair that each person in the relationship understands how much the other makes, saves and holds in debt. A shared account opens the lines of communication so each partner knows exactly how much the other has.
One study found that couples who pool their finances have increased relationship satisfaction and are more likely to stay together than those who keep finances separate. The research indicated that joining finances helps solidify the commitment and trust within the relationship.
Fewer fees
The obvious financial benefit of joint accounts is that you get charged fewer bank and credit union fees. According to Bankrate.com, the average American pays $7.69 in bank fees per month, which is almost $100 annually. A couple can avoid spending twice as much by sharing their accounts.
Cons of using a joint bank account
Of course, joint finances aren’t for everyone and come with some negatives. Here are a few of those:
Potential source of conflict
If you and your partner have different approaches to spending and saving, a joint account can be a source of conflict. For example, a saver may feel overwhelmed and frustrated by their partner’s constant spending. Or, one partner may feel comfortable with credit cards while the other primarily prefers debit cards. Ultimately, if you combine finances, you’ll have to get on the same page about your approach to spending money.
Less financial autonomy
If privacy is important to you, a joint account can potentially feel too exposing. For example, you may be frustrated that you can’t buy your partner a gift without them knowing. Or, you may find it hard that you can’t keep it to yourself if you indulge in an expensive treat.
Unequal work
A joint account often naturally leads to one person handling the bills. However, if this happens, it can feel like an unfair distribution of responsibility and work.
Potential future problems
If a couple has a joint account and decides to separate in the future, it can cause problems. For example, if it’s an unamicable split, one partner may try to drain the account.
Pros of keeping separate bank accounts
Today, many couples—especially younger couples—opt to keep their finances separated. Two of the benefits of having separate bank accounts are financial independence and the ability to keep assets and debts separate.
Financial independence
When you keep things separate, you don’t necessarily have to share all of your expenses, earnings and savings with your partner. If you’re someone who was single for a long time or worked hard to pay off debt or get to a place of financial stability, financial independence might be incredibly valuable to you.
Separate assets and debts
There are many reasons why couples might want to keep individual assets and debts more separate. For example, if your partner has expensive medical debt while you have none, you might want to keep your finances separate to ensure that only your partner is responsible for paying their own medical debt.
And while divorce rates have gone down slightly in recent years, people still do get divorced. Keeping this in mind, having separate assets and debts makes a split much more straightforward.
Cons of keeping separate bank accounts
Here are a few of the drawbacks of having separate bank accounts:
Logistical complications
Simply put, having separate accounts is more work when it comes to paying for joint expenses. You have to figure out who will pay which bills, who owes what to the other person, when to transfer money over and more.
Expense uncertainty
Another con of separate bank accounts is that it can cause conflicts of a different nature. For example, when you go out for dinner or incur an unexpected expense, you have to decide who will cover the cost. This can start to cause tension if one partner feels they pick up more than their fair share of unexpected bills.
Inhibited account access
If something happens to your spouse, having separate accounts means it’ll be more challenging to access their finances. Of course, it’s likely that you’ll be able to eventually, but it will take some time—which isn’t ideal in an emergency.
Unequal money distribution
Lastly, if one partner doesn’t have an income (such as a stay-at-home parent), it could become problematic if they don’t have direct access to the other partner’s money. In this situation, they become reliant on asking their partner for money when they need it, which causes an unequal power balance.
The hybrid approach: use both joint and separate accounts
Many couples these days are choosing a hybrid approach. They opt to keep a joint account as well as their own individual accounts. In this situation, you can allocate money proportionally based on your income and do what you choose with the rest.
To put this idea into practice, let’s say you and your partner’s rent is $1,500 and you pay another $750 a month in groceries, take-out and utilities for the two of you. This means your joint account needs $2,250 a month to cover all your combined costs. You make slightly more than your partner, so you calculate that you’ll cover 60 percent of the costs and your partner 40 percent. Every month you put $1,350 into the account, your partner puts in $900, and you’re both left to do whatever you want with your remaining money.
If you take this hybrid approach, consider ensuring that each person can access the money in the other accounts should something happen to their partner. This will be useful in the event of an emergency.
Another approach is to also use joint accounts as a way to save for mutual goals. Many people like to use other accounts to put away money for specific things, like retirement savings, savings for children, vacation funds and so on.
Discuss finances with your partner early on
Because there are both pros and cons of joint married accounts, it may be best for you and your partner to work together to find out which approach suits your relationship. Ideally, couples will get on the same page about finances as a whole. You can do this by having open discussions about existing debt, saving versus spending personalities, income, credit scores and expense splitting. Discuss financial goals, expectations and boundaries and how you want to manage your money as individuals and as a couple.
If one or both of you has a low credit score, it might be a good idea to focus on improving it. When couples get married, one partner’s low credit score can impact both people when it comes time to get a mortgage, auto loan or other type of credit. CreditRepair.com helps individuals take back control of their credit by evaluating their credit report for mistakes, disputing any errors and educating them on how to maintain healthy credit. Get started today.
Reviewed by Makeda Jackson, Credit Professional for CreditRepair.com.
Makeda Jackson has worked as a credit professional with the CreditRepair.com team for the last few years. Her goal is to continue the fight for everyone to have a fair, and accurate credit profile and for a chance at a better quality life. Her biggest achievement comes with the success of the hundreds of credit advisors that she has had the pleasure of educating. Her commitment to integrity and valuable service is extended out to both CreditRepair.com customers and to the people in her own team. Outside of work, Makeda loves to do outdoor activities, spend time with her family, and volunteer with her team for charity events.
Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.
