Should You Have a Joint Bank Account?

Determine if a Joint Banking Account is Right for You

One of the major money questions facing newlyweds is whether to have a joint banking account. Like everything else in marriage, deciding between a joint banking account or separate ones requires communication and patience. You both must have the courage to openly discuss your approaches to money and financial goals. How much do you make annually? How much will your monthly bills (electricity, healthcare, mortgage/rent, groceries, etc.) cost?

Are you a spender or a saver? What are your financial goals?

After you know how much money you have to handle and you know your feelings about personal finances, you must consider the advantages and disadvantages of joint banking accounts to determine the right system for you. Here, you can consider the possibilities of joint and separate banking accounts or both:

Joint Banking Account

Who should get it? Couples who trust each other completely, have similar spending and saving habits and goals, and who are looking for convenience should consider a joint banking account.

Advantages: A joint banking account is one in which both your names appear on the account, and you completely merge your money. You would deposit your money -- from wedding cash gifts to your salary -- into this one account and use the funds for expenses from the mortgage or rent to eating out. There’s no question where your money is, and you can easily pay bills.

Either of you can make checks, withdrawals, and of course deposits. Couples will find a joint banking account convenient because everything is in one pot and there is not much to juggle. If one of you passes away, the other automatically gets the money in the account without having to wait for probate.

Disadvantages: Since both of you have equal control of a joint banking account, either of you can deposit and withdraw money without having to inform the other. Even if this happens unintentionally and without malice, it can cause friction. Say you have $500 in your account and you make a check for $200 for the cable bill and your husband takes out $350 the day before, you will have a bounced check and a negative balance.

If you ever get separated or divorced, a joint banking account can cause big problems. One spouse could take all of the money regardless of who deposited it. Getting the money back could be a huge legal battle.

In addition to these problems, you and your husband or wife might feel as though you can never spend a dime without first checking in with the other person. This can make some people feel trapped and far less independent, which can cause resentment to build and be dangerous for your marriage.

How to Make It Work: A joint banking account is the right choice for some couples. If you decide to have a joint banking account, you will go to a bank and open the account together. You can determine how much to deposit in the account by tabulating your weekly or monthly salaries and coming up with a fair percentage for each of you to deposit.

Consider your budget when determining how much you should each contribute. Then, you can also agree on how much you can each withdraw after you’ve paid the bills each month. 

Keep in mind you can create a checking or savings account, so there is some flexibility in the type of account you use. Some couples keep separate checking accounts so they can keep tabs on some money, but put money into a savings account for longer-term goals.

Separate Banking Accounts

Who should get it? Couples who prefer total financial independence or those who had credit or debt problems before the wedding should consider separate bank accounts. If you and your husband or wife started your marriage on rocky ground – one of you cheated or you have communication or intimacy problems, for example – and you’re not sure if your union will stand the test of time, you should definitely maintain separate bank accounts.

No one wants to think about the possibility of separation and divorce, but in this day and age you can’t afford to live in a fantasy either. For your own benefit, you should try and be honest about the realities of your marriage.

Advantages: With separate accounts, you and your husband or wife can maintain a certain level of independence. You really don’t have to check with each other about purchases. If one of you is in debt or has a credit problem, the other will not have to worry about it. You can maintain your finances in the same way that you did when you were single.

Disadvantages: You might argue over big purchases, such as a house, and common expenses because you’re so used to making decisions on your own. One of you may have a lot more or a lot less money than the other, which could cause you to have different lifestyles despite living under the same roof, which can complicate your relationship.

For instance, if your husband, who earns less than you, is always trying to spend time at home to save money, but you’d rather go out to eat and take in shows, you might have problems. In addition, if one of you should pass away, the other will not automatically receive the money in your account. Therefore, it behooves you to spell things out in a will.

How to make it work: This is probably the simplest of all the options. You can just keep maintaining your finances in the way you did before the wedding. But you’ll have to determine a fair way to pay the bills and expenses that you share. For some couples, bills are split 50/50, while others come up with percentages that adjust to their individual use of a particular service. For example, if you work from home and therefore use more electricity, then you would pay more of the gas and electric bill.

Separate and Joint Banking Accounts

Who should get it? Couples who want to have the independence of a separate account but also want a place, such as a joint banking account, to keep money for common expenses and big purchases should consider having both joint and separate banking accounts.

Advantages: Having both joint and separate banking accounts allows you to have the best of both worlds. You can maintain some financial independence and have money to spend without having to consider the feelings of your spouse while at the same time merging money that you both use for things such as cable and the water bill. If you ever divorce or separate, you will both have money that is yours alone.

There is an added bit of security when you know you have money for yourself and for the two of you as a family.

Disadvantages: Keeping track of separate and joint accounts is a bit more work. You have to set clear ground rules about which money you can each keep for yourselves and which money you will share, how much you’ll each contribute, and who will maintain the joint account. Then, you’ll have to come up with a system for informing each other about deposits, withdrawals, and checks in the joint account. This all requires planning and communication.

How to make it work: You’ll have to be organized about keeping track of your separate account and the one you share. Communication is the key to making this system work and you’ll have to inform each other about any action you take in the joint account.

Perhaps, you’ll decide that one of you will pay all the bills using the joint account and that you’ll each deposit a percentage of your salary each month into the joint banking account. The point is that you’ll have to work together to make this system work for the two of you.