Should Married Couples Have Separate or Joint Accounts?

By Carrie Sullivan

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The most common question I get from married couples is whether they should combine their money or keep it separate.  When it comes to couples and finances, there is no “one size fits all.” Everyone is different.

The most common question I get from married couples is whether they should combine their money or keep it separate.  When it comes to couples and finances, there is no “one size fits all.” Everyone is different.

There is no right or wrong way to do this. However, when it comes to making household financial decisions, here are 6 important tips every couple should consider:

1. Your partner’s financial status before and during the marriage and how each is affected.  

2. The family’s total household finances.

3. Your state’s laws regarding marital property.

4. How you are going to share and communicate financial responsibilities

5. Future and/or unforeseen life changes and how you want to handle them financially.

6. Your partner’s (and your own) short and long-term goals.   

TIP #1: Understanding the financial status of both partners

Whether you decide to combine your money once you’re married or keep it separate,  it’s important that you discuss and understand each other’s financial status before entering into the marriage and throughout the marriage.   

Prior to entering into the marriage, what assets and liabilities do each of you have that you will be bringing with you into the marriage?  

  • Assets & Liabilities
    • Understand each other’s assets coming into the marriage.  What does your financial snapshot look like?  What do you own, and what do you owe?
  • Credit Reports
    • Each of you should obtain your credit report and score from all three credit bureaus, Experian, TransUnion, and Equifax.
    • Go over the reports together to thoroughly understand your full financial picture.
  • Debt
    • Do you have a debt?  
    • What type(s) of debt do you have?
    • What do you owe; what is the grand total of all your debt?
  • Extended Family
    • Managing your finances as a married couple while considering the expectations, needs, and commitments your partner has to their extended family is important to understand from the beginning.
    • Make sure you are able to live with and respect your partner’s commitment and agreements made in a previous relationship and/or a divorce decree such as child support or alimony. 
    • Make sure you discuss and understand how your partner feels about helping family members out financially, such as a parent or sibling, and getting clarity on what those boundaries are. You need to talk about the way that it will affect both of you and your household needs now and in the future.  

TIP #2: Understand the financial status of your household

Once you’re married, it’s important to understand the entire household’s financial status, whether you separate your finances or not.  As a couple, your financial status can and will affect each other at some point in your life.  

An unhealthy relationship can be negatively affected by your habits, beliefs, and behaviors when it comes to money. Money is very personal and is one of the top reasons for divorce today.

One of your goals as a married couple may be to buy a house jointly, and bad credit or a low credit score could be a big stumbling block in obtaining a mortgage.

Your money status can significantly impact your retirement years. Maybe you are debt-free and able to retire at 65 or even earlier, but your spouse has a mountain of debt and can’t afford to retire. Now you can’t enjoy retirement together or comfortably. This could cause heartache and resentment.

Money is neutral; it’s not good or bad.  The value isn’t in the money itself; the actual value is determined by how you use it.

How you manage your relationship matters much more than how you manage your money. 

 If you are willing to commit to building a healthy relationship with your partner, managing your money and sustaining a healthy financial picture will follow.

TIP #3: Knowing your state’s law about marital property

Know your state’s laws regarding marital property.  Assets and liabilities you bring with you going into the marriage stay with you.  However, assets and liabilities incurred during the marriage can be considered jointly owned, depending on the state you live in.  

Some states are community property states, whereby all assets acquired and debts owed are considered community property, owned and owed by both spouses.

Another thing to consider is how your financial status will affect either one of you at the time of death. Under common property states, your partner’s debt can be transferred to you or yours to them upon death. 

If you are not living in a common property state, your deceased partner’s debt could eat away their estate, leaving you nothing or very little. So, you could be strapped with more debt even if you are debt-free at the time of your partner’s death.

TIP #4: Set ground rules for communicating

Set expectations and ground rules for sharing and communicating financial responsibilities.

TRUST:  Build trust by being honest with each other about your financial habits, good and bad.  Use your strengths to help one another become stronger in areas of weakness.

RESPECT:  Everyone thinks and reacts to money differently. We all have the common basic needs, food, shelter, clothing, and transportation.  However, our wants can be quite different.  Speak openly about your wants.

Listen respectfully to your partner’s wants and feelings about money.  Find a neutral spot where you can work towards a common goal that will get you both to desire and value the most.

ACCOUNTABILITY:  Don’t make excuses.  Nobody wants to hear excuses; actions speak louder than words.  Take full responsibility for your actions; OWN IT!  Be honest with yourself and your partner about finances.

Schedule weekly financial meetings to stay informed and updated on ALL the household finances and goals.  Put the meetings on your calendar and don’t cancel them!

TIP #5: Discuss unforeseen life changes

Make sure you think about, discuss and prepare for future and/or unforeseen life changes and communicate how you want to handle them together as a couple.

If you choose to split the bills and allocate expenses equitably all is good… until it’s not.  What happens when one of you loses your job, gets sick and can’t work, or chooses to be a stay-at-home parent if children are in the picture?  

As a couple, it’s critical that you talk about circumstances such as raising kids, planning for emergencies, and retirement.

Kids are a big lifestyle change, physically, emotionally, and financially.  It’s in your best interest to sit down together and have an open, honest conversation about children before you have them.  If you already have kids, then now is as good a time as any to discuss how you want to raise them.   What are your expectations, goals, and thoughts about kids?  Do you want kids?  What type of environment do you want to raise them in?  How will you plan financially to pay for them and provide security for your family?

Planning and preparing for emergencies can help ease the pain, financially, and ease any tensions in your relationship that can often arise when you’re not only anxious or overwhelmed about the emergency itself, but also how you’re going to handle it financially.

When setting up a bank account to build an emergency fund here are a few tips you might want to …  

  • Set up a separate account, specifically for emergencies only (ideally at a different bank than your primary bank so you aren’t as tempted to dip into it for those “nonemergencies” that you may try to justify as “emergencies” 😊).
  • Set the account up in both your names and ensure it requires both signatures for all withdrawals.
  • Everyone’s wants and needs are different.  Make sure you both discuss and agree upon what you deem as true emergencies and commit to following whatever that agreed definition is.

TIP #6: Communicate short and long-term goals

Communicate openly and honestly about your short and long-term goals, values, and beliefs, and how to ensure your habits are aligned with those goals, values, and beliefs.  

Ignoring your finances or not being transparent about your finances with each other can quickly divide your spending, saving, and investing power.  This affects your relationship and the alignment of your values and beliefs with your financial values.  It affects your ability to obtain a mortgage, your ability to become debt free and stay debt free, and your ability to retire when you want.  It can also rob you of any sense of security you could have or want for your family.

The best way to set yourselves up for success in your relationship and your finances, whether you have combined or separate finances, is through:

  • Transparency
  • Open communication
  • Regularly scheduled financial meetings to 
    • Review your finances
    • Update your financial plan
    • Commit and agree on any changes or updates
    • Prioritize your finances to keep them aligned with united goals you are both working towards together.

So remember, it’s not about whether you have combined or separate bank accounts. It’s about how transparent and honest you are with each other regarding the total household finances.  

Money is neutral; it’s not good or bad.  The power is not in money itself; it’s not in how much or little money you have.  The power comes from what you do with your money, what you spend your time and energy on, and how you communicate with each other.  

So, set clear expectations and goals and then agree and commit to following them, and you will build and sustain a healthy relationship with your partner and your finances.

About Carrie:

Family Money Mindset Coach with love and passion for family values and life-long learning.

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