Separate Bank Accounts in Marriage | 7 Reasons Why Both Parties Should Manage Their Own Money

July 19, 2021 | Editorial Team

When couples get married, there are many conflicts. One is the decision to have separate bank accounts in marriage or joint accounts. It is becoming more popular with this new generation to have separate bank accounts. Especially for money management. Many couples choose to split expenses and bills. But, some people prefer to have a separate account for personal expenses.

Some people may believe having separate bank accounts is due to a lack of trust in your partner. But, that is not always true. Some may have a drastic difference in income, spending habits, and financial philosophies. There are many positive aspects to having separate accounts. It is also becoming more and more normal.

Should You Have Joint or Separate Bank Accounts?

There is no right answer to this question since there is no superior approach. This decision is specific to a specific family’s needs. Some people prefer to keep their finances separate. Others find it much easier to pay bills, save, or own property with a joint account.

A joint account usually means a savings or chequing account. Both spouses have equal access. While having a joint account does mean that some things are easier. It is important to determine the benefits and drawbacks of both.

Benefits of a Joint Bank Account

While there are some complications that merging assets and debts can bring. There are also many benefits of having a joint account. Some of these include:

Financial Union

Joining hands in marriage is a symbol of union. Having a joint bank account as a couple serves as a symbol of fiscal union. Marriage shows a sense of official commitment, and a joint account does the same for some couples.

Some studies show that having a joint account leads to a happier relationship. The increased trust may be the reason. But it is also important to remember that every couple is different.

Simplified Financial Tasks

As a married couple, there may be a wide variety of shared financial tasks and bills. Instead of paying each other, a joint account allows equal access to the funds. There is no need to share information for personal accounts or deposit cash in a pinch. A joint account gives both account holders separate things. This includes credit cards, debit cards and chequebooks.

Legal Tasks

The legal system can make it difficult to access your spouse’s funds. In case of emergency or when one passes away, this is important. There can be a lengthy process, that a joint account eliminates. Marriage is a legal commitment, whereas a joint account is like a legal fiscal commitment.

Money Management

Having a joint account helps both account holders manage the money that comes in and out. Families share many expenses. it helps couples keep track of their finances. There is less chance for surprises or missed credit card payments. With two pairs of eyes, married couples can work together. They can keep track of payments, and balance the chequebook.

a couple holding hands in an empty room

7 Reasons Why Separate Accounts are Good for Your Marriage

Some couples like the ease of paying through a joint chequing or savings account. But divorce and other complications can make things messy. Banking and finances are a serious topic. So, keeping your finances separate may limit the risk. Some people believe that it separates accountability. But really, it happens a bit differently.

Couples can still save and spend together. They can use a different approach that still allows autonomy and personal spending. Separate accounts do not have to mean that one spouse gives more or is in charge of finances. Actually, separate accounts can help split bills in half. It can also help save up personal funds separately. Some positive aspects of having separate accounts include:

1. Autonomy

Spending money can be very personal for some, and a joint account can take away some of that autonomy. The other partner can access the account whenever. This means every transaction can be over-managed by the other person. Earning may also differ between partners. So, putting all that money into a joint account can be a loss of control.

2. Avoids Messy Separations

Divorce is sometimes inevitable. And a joint account can make it even more complicated. If the bulk of your money is in that one account, it is extremely risky especially if you are getting a divorce. It is messy and difficult to track the money going in and out. Which can cause even more money arguments on top of the separation.

3. Premarital Savings/Debt

Young people are waiting longer to start their families. This means that spouses are likely to bring larger financial assets. Such as their premarital savings.

Some may feel they need to put their savings into the joint account. This may fund a downpayment on a house, monthly bills, family funds, or mortgage. But, it is important to note that in the case of a divorce, your spouse will get half of your premarital savings.

Like premarital savings, your partner may have premarital debt. This may become your problem as well. With a joint account, you may have to pay off your partner’s debt with money that you have earned.

4. Difference in Earnings

You and your partner may have a different income, and merging your money could lead to added friction. It does not matter how progressive or educated they are. It is still difficult to split the difference when income is different. If you merge all your money into one account, it could get difficult if the relationship ends.

Each spouse works hard for their money. It may be helpful in maintaining separate accounts for personal spending. Even if you and your spouse are a dynamic duo, there needs to be a discussion. You and your spouse should determine what percentage of your income to consider joint funds and non-joint funds.

a couple sitting in front of the laptop discussing finances

5. Spending Habits

A husband and wife may have different spending habits. This can cause tension with a merge of accounts. People should be able to spend according to their own will. Spending can cause unnecessary friction in a relationship. Since the merged accounts are technically earnings from both spouses. Some may feel uneasy if one partner spends more than the other.

It is important to set a budget. And, separate banking can allow each spouse more spending freedom. Some people are more spendy than others. With a joint account, many find that they start to watch their spouse’s purchases a lot. Personality changes the way we spend. Financial independence can help with resentment and hostility.

6. Money Management

Sometimes couples that share a joint account have one spouse that ends up taking care of the finances and joint savings. This is simply just because one person may be better at it. For some this is a strategy that works, but not always.

After a divorce or separation, widows and divorcees may struggle financially. By keeping separate accounts, both partners can learn to manage their money. This makes the independent and financially literate.

7. Credit

With a joint account, your credit score drops if your spouse falls short on their payments. Credit is an important score to keep up, as companies run frequent cheques in almost every aspect of life. Credit is super important. Sometimes it is better to take fewer risks and keep your accounts separate. Some choose to remedy this by having joint and separate accounts.

A small shopping bag in shopping trolley on the table with a person with laptop and credit card in the background

What Does Having Joint vs. Separate Bank Accounts Say About Your Relationship?

There are pros and cons to both types of accounts. Something like a bank account should not determine the status of your relationship. For some couples, a joint system works better. For others keeping separate accounts is the best solution.

Some people believe that having a separate bank account is a symbol of trust. But, young people today are much more likely to keep their finances separate.

With a separate bank account, both parties can manage their own money. This can be great for those that like to have control. It is also better for couples that have different spending habits. Sometimes these differences can increase friction in the relationship. It can even lead to divorce.

Joint bank accounts can be great for those that don’t mind letting one person in the relationship take responsibility. Both account holders can work together towards a common goal. Some people believe that this symbol of unity can help strengthen the relationship.

a couple on the motorbike with bags in their hands

What Percent of Married Couples Have Separate Accounts?

The number of married couples that have separate bank accounts is growing fast. Young people have a greater sense of individuality and autonomy. They may want to maintain that. Many couples today choose to have both joint accounts and separate accounts. This brings the benefits of both to the relationship.

Around 42% of couples have both, and that number is likely to keep growing. Almost 30% choose to keep their finances completely separate. Today, it is completely normal to have separate accounts. The world is changing and people have different financial mindsets.