Joint or Separate Checking Account?

For a long time, the blending of assets between couples was considered fundamental to marriage. It helped couples practice trusting each other with both day to day, and important, financial decisions. However, this tradition was based on standards where couples married early, and grew their wealth together. With adults marrying increasingly late, this model may need to be revisited based on your particular situation.

Millennials marrying later than their parents and their parents’ grandparents did often means they are entering into a union with substantial assets or debts, at a highly independent point in their lives. In such cases, the blending of assets can create tension, and even cause a strain in the relationship. Here are a few things you may want to consider.

Joint Bank Accounts Promote Trust

Transparency is often considered vital to a marriage. Joint checking accounts not only allow couples to have a clear insight into their general financial situation, but it also encourages each party to be open about their spendings and earnings.

A joint checking account will help with the planning of home expenses and large purchases, particularly when it is coupled with an “equal-say” attitude between the couple. Generally, this option is best suited for couples where each spouse earns and owes about as much as the other. When coupled with separate accounts, joint checking accounts are also beneficial, particularly when one party is the main breadwinner and is looking to make some funds accessible for joint use.

Separate Bank Accounts Allow Independence 

Joint accounts can be a source of conflict; each major spending decision has to be agreed upon. Separate bank accounts eliminate the need to keep track of your partner’s spending habits, which can cause tension in the long run.

Separate bank accounts allow you to protect yourself and your assets in the event of a separation or divorce. Separate bank accounts also lower the possibility of a nasty financial dispute between you and your partner, should you wish to part ways. This can help couples feel safer and more protected in their marriage, which in turn can promote a more peaceful and even trusting union. In case either party is carrying a lot of debt, your financial advisor will likely advise against a joint bank account. 

A Final Note

Married couples should be open to discussions on how to maintain their earnings and assets. If you struggle with the idea of someone else potentially dipping into your earnings to make a purchase you haven’t given the “okay”, you may want to consider separate accounts. If, on the other hand, you want to blend your earnings to give equal weight to each individual, a joint bank account is the right option for you.

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