Joint Accounts

When it comes to personal finance there really never is a one size fits all answer.  Yet at the same time I still have a problem with couples that keep separate finances once they are married.  I personally think this is setting yourself up for failure.  That’s not to say separate isn’t a bad idea if you are just starting out as common law, but marriage usually indicates a certain commitment which just makes sense to join the accounts.

The reasons I like joint accounts is:

  1. It turns conversations from ‘mine’ to ‘our’ or ‘we’.  It’s a subtle thing, but it does matter.  It’s helps to create a deeper commitment to your relationship and reinforce the couple concept in your mind.  I think this is half the reason you get wedding gifts.  It greats a bunch of new stuff that you automatically think of as ours, rather than your old stuff and my old stuff.
  2. Simplification.  With just one main chequing account it is easy to setup all your pay cheques into one account and all the bills on auto debit out of that account.  It removes any chance of missing a bill payment and cuts out a lot of potential fights of who was suppose to pay what.
  3. Helps to reduce inequity.  I’ve had several friends comment over the years that don’t I resent being the one in the relationship that brings in the most of the money?  No.  I’ve almost never thought of how much of it is mine compared to my wife’s.  Why? The joint account.  It just turns into ‘our’ money when it goes in.  Also I’m grow up enough to realize that money is just one way to contribute to a relationship.
  4. Reduces any chance to hide things.  Relationships fail when you can’t trust the other one.  In money it’s harder to hide things when everything passes through one account.  So by going joint you are offering to stand financially naked in front of the other one.   This provides a level of trust that is hard to beat.

In there defense some people like to point the following drawbacks of joint accounts:

  1. “You don’t have any money that is just yours.”  Not true at all.  We personally keep spending cash as buy what you want money and all birthday money is strictly just for the person who gets it.
  2. “You can’t buy a gift without them knowing.” Again, not strictly true.  We personal just tell the other one not to look at the Visa statement the month before their birthday and two months before Christmas.  Or you could just get separate credit cards and keep the joint chequing account.

Well that’s my thoughts on the issue.  So what about you?  Do you use a joint account or not?  If not, why?

24 thoughts on “Joint Accounts”

  1. I use joint account with my wife. I drives me nuts when i hear couples talk like “he pays the mortgage” and “I pay the bills”. I really like how you said that its setting up for failure, I couldn’t agree more.

    I find its just another step for people not to commit to each other, I’m married and beleive in it strongly, and sometimes I think people stay common law to avoid the true commitment, the joint account thing is just another way to keep their lives seperate.

    I have a friend, who want to go on a europe trip, so I told them simply just start saving some money now every month for it, her answer was, yeah I can save some money, but I’ll have to convince my boyfriend (they’re common law) to save the money too. Man its drives me crazy, you’re a couple, you should have goal together, financial things should be based on goals together with your money combined!

  2. I completely agree. When we got married joining our accounts wasn’t even a question. I think it’s insecurity that drives people to keep it seperated, that no one could do it as good as me, I can’t trust you with access to my money. Really I think it’s one foot out the door.

    and off my soap box.

  3. My wife and I keep a joint account as well. I don’t even want to imagine the headaches of maintaining two separate chequing accounts and managing bill payments from each.

    To keep things “secret”, we also both have our own savings accounts and credit cards. That allows for some discretion around those special times.

    Moving to a joint account solved MANY of our money issues and is a decision I’ve never regretted. For anyone who hasn’t made the move, get on it! Once you let go of the yours and mine mentality, you’ll be happy you did.

  4. My wife and have a joint household chequing account in which both of our paychecks are deposited and all of our bills are paid. We keep a joint household savings and emergency account as well.

    Last year we setup personal chequing accounts to handle our personal expenses. This was done as a budgeting tool. In past we tried budgeting a weekly amount to spend but in my own experience I found it too hard to control my spending when my debit card was linked to our large pool of money. Withdrawing a set amount in cash also didn’t work as cash in my pocket just burns a hole. So with these personal chequing accounts we transfer an equal, weekly amount from the joint chequing account to cover our personal discretionary spending.

    To date it’s worked wonderfully. My spending is down and there is no resentment that one of us (me) is spending more than their share. We are both free to spend our weekly “allowance” as we wish, we can blow it all each week or save it for something bigger.

    Of course we still consider everything we own to be “ours”, whether it was paid from our personal accounts or from the joint account.

  5. Oh brother. And apparently, people get married just so they can act righteous towards common-law couples.

    Anyway. My boyfriend and I live together, and we keep separate accounts, but we also have a joint account. We are planning on implementing Suze Ormon’s technique for couples, which boils down a joint account from which all shared expenses (rent, groceries, bills) are paid. Each partner contributes proportionally to that account based on their income.

    And as for all the people stating that joint accounts is one step down the road to a failed relationship, I suggest you open your minds a little. Not everybody rushes to either the alter or the joint chequing account. Each couple has their own way of working and making their relationship functional. Some never share accounts (just like some never do get married); others slowly merge their finances as their relationship grows and their trust builds. But regardless, it’s not your place to judge what will make them happy.

  6. My husband and i have separate accounts and this works for us. I deposit money into his account every payday and he pays the bills. we have been together for 13 yrs and this is what works for us.

    We had a joint account once (because i thought it was what married people did) and all we did was fight about money. We are very different in how we handle money, he is very organized and i am not, i try but i struggle… and we found that it keeps the peace in our house to have separate accounts.

  7. CD,
    I agree. It’s pointless to try and distinguish “my account”, “my bills” and “my money” from “your account”, “your bills” and “your money”. I do agree with each spouse having a little bit of their own spending or discretionary money but once you’re married all money is “our money” no matter how segregated the individual accounts are…just ask anyone who’s been divorced… legally once you’re married half of everything you own belongs to your spouse so why complicate the issue with separate accounts?

  8. Separate chequing, joint savings at our household. It’s worked for almost a decade. Is the judgemental “shows insecurity”, “lack of commitment” garbage really necessary? (From the commenters in this and multiple other threads on the subject, not Tim). Frankly it makes me see red. Those arguments are reminiscent of the “teh gays are undermining the integrity of marriage!” hysteria. If you’re such a sensitive little snowflake that Steve and Andy next door getting hitched, or one of you taking on the gargantuan task of writing the cheque to Rogers once a month, will send you to the divorce courts, you may want to lay off those of us with separate accounts and book some counselling.

    /off soap box too, with arms folded and stamping my little feet

  9. I have a hard time understanding couples with completely separate finances. That said, Guinness’ method of joint savings and separate chequing accounts sounds perfectly reasonable to me.

    Guinness – you can stop stamping your feet now! 🙂

    Mike

  10. All of the accounts between my wife and I are joint account with the exception of a few. There are very valid reasons why some would opt for individual accounts. Consider this very real case (It IS a real case by the way):

    You are married and your spouse over the years develops a really bad spending habit. Despite trying to have real conversations about money and spending wisely, you end up being called cheap. Sunday you find your spouse liquidating investments to buy a car you can’t really afford and all you see is your hard earned funds going away.

    This happens frequently. I have seen it many times over my 15+ years in accounting and financial services. You may actually save more and reduce the headaches by having a well put together Will and separate accounts!

  11. I agree completely. It’s about trust, really. It’s about whether you see marriage as a lifelong, “we’re in this together” kind of deal.

    We have a joint account for most things, where all paycheques get deposited and bills get paid, plus two separate accounts for the small amount of discretionary spending that we budget for and can spend without discussing together.

  12. Always a thought provoking topic! I like the baby-steps, keep-trying things approach. When we lived together, my now-husband and I kept finances separate, just splitting the bills down the middle. I was not willing to join all of our money until I knew the commitment was permanent.

    Once we decided to get married, we set up a joint account, but kept an account each, into which we transferred an agreed upon amount for personal spending. But actually, after a few months, we realized that those personal accounts were superfluous and the trust was there to not bother with them. We closed them and now have only joint accounts–and definitely experienced a very positive shift towards the “our” goals and focus. We are different in our approach to money, and we don’t always agree, but the joint account and relationship forces us to talk through where our money goes, how it relates to our values, and how to respect our individual needs and choices within the context of our relationship. It works for us, but these can be contentious issues, and I understand why not everyone wants to be constantly confronting them!

  13. The “trust” thing is absurd.

    If you trust the other one, why would you want a joint account to make sure the loved one is “involved for a lifelong kind of deal”?

    Suppose you are single and billionaire. Who would you trust more: a lover who insists on having a joint account or a lover that does not care?

    If you REALLY trust each other, then the decision to use either joint or separated accounts should not involve trust at all.

  14. My wife and I keep a joint account, and it works well for us. Similar to others above we each have a personal spending account that gets a set amount each month from our joint account.

    One problem with the joint account is keeping track of who is doing any investing/saving (for taxation purposes). Ideally, you’d be paying more bills from the partner who makes the most, thereby allowing the partner with the lesser income to make the investments and get taxed at their lower rate. It’s a way to at least partially implement income splitting.

    On a tangent, it’s too bad couples don’t get taxed based on their joint incomes – then a joint account would definitely make sense (to my mind). I’ve always felt it a little unfair to the families with a stay at home parent to be taxed individually. Just one more way our society pressures both partners to work, when raising children may be the best contribution anyone can make to our society.

  15. We’ve come up with a bit of a hybrid system. We have three accounts, all set up as “joint” with the bank. Two are chequing accounts (the “his” and “hers” accounts) and one account is a high-interest savings account (the “ours” account).

    We treat the chequing accounts as if they’re “personal” accounts, and we trust each other not to use the other person’s account without getting the OK from the “owner” of the account.

    We earn similar incomes, but we transfer money between our accounts at each payday so that each “personal” account gets the same income. We split expenses 50/50, so there’s no tension over who pays more or less for anything. Under the umbrella of “expenses” we include transfers to the joint savings account, which serves as our emergency fund and a slush fund for larger purchases (house repairs, appliances, etc).

    We have very few disputes over money. The one downside of this system is the extra bank fees, but we feel it’s a worthwhile tradeoff for a system that works as well as it does.

  16. I think you show more trust when you allow your partner to keep a separate account, rather than create a joint account where you can police each other.

  17. I think it boils down to the people in the relationship and what works best for them.

    My wife and I went to a joint account many years before we married and it has worked well for us. Everything operates out of the same account and we do not allocate any “spending money”. We just buy what we want/need and just let the other person know. If it’s something substantial, we talk it over first and make the decision to buy or not buy together.

    But, like with all couples, what works for one won’t work for the other… it depends on the personalities involved. Money can be a very touchy subject with some couples.

  18. Wow. That’s a lot of comments!

    I’ll start out saying I did not try to offend anyone with the post. I tried to stay general and just say what was on my mind (Hence the first line of the post to point out I know I’m not completely right on this).

    Thanks to everyone who posted alternative systems of handling the money. It was interesting to see what works for various people. I decided to just focus on the joint chequing account in the post , but in reality I was mostly getting at people the keep completely separate finances.

    I also tried to stay clear of focusing on common law relationships since I’ve seen so many variations on how those work for people. I didn’t want to get bogged down in a married/common law debate, because I really don’t care which people do. Yet the language of those two tend to get fuzzy so I decided to focus on married couples in the post.

    Excellent debate everyone. Thank you for your thoughts and ideas!

    Tim

  19. My fiance and I have had this system for the past 2 years and it’s working great for us:

    we each have our own chequing account where paycheques are deposited.

    from each paycheque $x goes into the joint chequing account, from which all joint bills are paid (rent, groceries, toiletries, things for the apartment etc).

    we each keep the remainder of our paycheques beyond the $x into the joint. this means that overtime, bonuses and profit sharing are also kept by the earner. we’ve agreed that (for example) if I work a 95 hour week (it’s rare, but it happens) I am the one who’s put in the extra hours and I am the one who gets to keep the overtime cash.

    it’s worked very well but we may reconsider once we have a house and adopt a system where the entire paycheque goes into the joint and we each withdraw an allowance…not sure.

  20. WHAT?! men pay bills, women spend money.
    that is one thing that hasnt changed in the last 50 thousand years.
    i think the husband should go work bring home the money keep in charge of the accounts and pay the bills. then whenever he wants to buy something he can if he feels like he has enough left over. as for the wife, i think the husband should give her so much money a month (or week…depending on how much she likes to shop) to go and buy food/household items/ect. thats the way my parents always did it and they been married for almost 50 years.
    it workes out great.

  21. @brooks: I know your comment is just a troll, but here’s something to think about: my wife makes more money than I do. Should l keep her salary and dole out an allowance to her?

    It’s 2008. My situation isn’t unique. Nostalgic notions from the fifties probably won’t work so well today.

    So brooks, are you married?

  22. My spouse, who makes more money than me, has proposed that we set up a joint account. Currently we have separate accounts. I pay most of the household bills , to which he contirbute proportionately, on an automatic basis and he pays for the food, the car and house insurance and our cell phones. He wants to shre his money with me (Great!) but I don’t want the hassle of having to account for every little purchase that I make. (Had this happen with my last relationship). He can’t understand the value of a facial or manicure and we even disagree about what clothes I want to wear. (He wants low cut and short skirts/dress of course and I prefer classic casual)

    What do I do?

  23. Susan,

    Talk to him. Find out why he wants a joint account. Then talk about what concerns you have. Make sure you set up some spending money that each of you get to use with no questions asked. That way you don’t have to defend yourself on stuff that REALLY matters to you.

    Hope that helps,
    Tim

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