Joint Or Separate Accounts: How Should Couples Handle Finances

Regardless if you have joint or separate accounts, couples will disagree about money from time-to-time.  But would you go so far as to hide purchases from your partner?  Financial infidelity can be as damaging to a relationship as sexual infidelity, and is one of the leading causes of divorce today.

A recent survey found that more than 34% of men and women who have kept money secrets say it’s because they disagree with their partner about where to spend it.

When my wife and I got married, we combined our finances into one joint account and haven’t looked back.  But for many couples, deciding whether or not to combine your personal finances can be a delicate subject.

Related: Couples Money – Savers vs. Spenders

There are three common approaches for couples to consider when setting up their finances.  Make sure to discuss the pros and cons before deciding which one works best for your situation.

Use a joint account for everything

With this approach, couples combine their incomes and pay all expenses – both joint and individual – from their shared account.  This makes tracking expenses as a couple very simple, and can help build an open and transparent relationship.  However, this arrangement can be hard for people who enjoy their financial independence.

If you choose this method, consider whether there will be some unique expenses that you handle individually, such as paying off debt that you had before you entered the relationship.

Related: Is A Prenup Really Necessary?

Keep separate chequing accounts and have a joint account that you use for shared expenses

With this approach, couples use their personal chequing accounts for individual expenses, but open a joint account to use for shared expenses like groceries, rent or mortgage payments, and utility bills.

Couples that choose this option can split their shared expenses easily.  Because individual purchases are separate, though, budgeting as a couple can be more difficult.

If you choose this method, you need to decide which expenses will be paid for jointly, and how much each of you will contribute to shared expenses.  Will you split them 50/50 or contribute a percentage based on your incomes?

Related: Treating Your Marriage Like A Business (Financially)

Have completely separate accounts

With this approach, couples maintain their separate finances, and split joint expenses as they come in.  This may work well for couples who value their financial independence, but can be difficult in other ways.

Sorting out how to divide every expense takes some effort from each partner and can cause confusion.  Also, budgeting as a couple can be complicated when you both maintain separate accounts.

Joint Borrowing

How you decide to handle your finances as a couple can affect your individual credit reports.  If you have a credit card together, only the primary cardholder will develop a credit history by paying it off on time.

Related: Understanding The Risks Of A Joint Account

If you’re thinking about expenses using a joint line of credit or a joint credit card, don’t forget to consider your responsibilities as a joint borrower before making your decision.  If you co-sign a loan, you become equally responsible for repaying the loan.

How we handle our finances

My wife stays home full time with our kids, so we don’t have to worry about how to divide two salaries.  But since I’m the sole bread winner and also look after our household budget, it can be frustrating for my wife if she feels like she doesn’t have much control over our finances.

Related: How To Survive And Thrive As A Single Income Family

To overcome this, we discuss our financial goals – both short term and long term – so we’re both on the same page.

For day-to-day spending, I like to use a cash back credit card for my purchases, but instead of monitoring everything my wife buys, she just takes out some cash every month to spend on whatever she wants – no questions asked from me.  This also helps the ‘surprise’ factor when buying gifts for birthdays and at Christmas.

How do you handle your finances as a couple?  Do you have joint, or separate accounts?

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  1. Mrs. Pop @ Planting Our Pennies on September 3, 2012 at 8:03 am

    We combine everything into joint accounts and use rewards credit cards to pay for pretty much all purchases so that we track everything. We did this when our salaries were super mis-matched, and still do it now that our salaries are pretty even. We don’t tend to think of “my spending” or “his spending”, just “our spending”, doesn’t matter who actually went to the store.

    • Echo on September 3, 2012 at 9:21 am

      @Mrs. Pop – That’s the way we think too, but it seems easier with just one income. I always wonder how two income families divide up the finances, and your method sounds pretty good.

      Thanks for stopping by!

  2. Koala on September 3, 2012 at 9:49 am

    We’re almost completely joint, but we still have a few separate accounts, like my student account, and ING accounts.
    We also have separate credit cards. We use the joint one for most purchases, but gifts can be bought with our separate credit cards without the other knowing.

    • Echo on September 3, 2012 at 2:02 pm

      @Koala – That makes sense. My wife keeps a credit card in her own name to continue building credit history.

  3. Joe on September 3, 2012 at 11:10 am

    Never ever ever co-sign on credit. *puts on white lab coat* Based on my extensive watching of Til Debt Do Us Part, the vast majority of “financial infidelity” clashes occur when one spouse lends his or her name to a spouse with less credit history.

    It’s one thing to share a joint account (I think each person should have a separate account, anyway), but entirely another thing to let debt seep in at the seems. Joint debt is like the tragedy of the commons. If EVERYBODY is “responsible” for it, then NOBODY is responsible for it.

    • Echo on September 3, 2012 at 2:05 pm

      @Joe – that’s true, couples can get into a lot of trouble when they co-sign on credit. I’m not convinced TDDUP is an accurate portrayal of couples finances though. The show is scripted like an episode of Kitchen Nightmares.

  4. SE Book on September 3, 2012 at 11:24 am

    I think it is wise to have a joint account that you both contribute to but still keep an account of your own.

  5. connor on September 3, 2012 at 11:36 am

    When my wife and I got together initially, my salary was much more than hers. While we kept separate accounts, cards, investments etc, we are similarly matched (moderate spenders/savers but not nit pickers!)and are fairly disciplined about keeping track of spending. To keep things transparent, we have used Quicken (for about 20 years?) for all “our” accounts so nothing is hidden. When she stopped full time work, she wanted to have her own accounts so I deposited a “salary” on a monthly basis into her account so she still felt independent. (I think it is important that the spouse with the primary income does not try to control the other person through the purse strings). Being the numbers person,I make a monthly update of “our” financial status so we can have a continuous open discussion and know where we stand. Now that we have both stopped work, we are able to maintain a relationship that is free of disputes about spending and saving, and can align our future financial goals.

  6. Echo on September 3, 2012 at 2:10 pm

    @connor – Thanks for your comment. That sounds like what my wife and I are striving toward. Good luck with your financial goals.

  7. Shawn James @ Financial news on September 4, 2012 at 1:37 am

    I have joint account with my wife. There are pros and cons of it. It restricts me to spend more money as my wife will be well familiar with spent money. She is a house wife(Not working woman) therefore her expenses are less respective to me. She always say that I spend unnecessary. However I don’t think so.

    Even, she is also happy that I do not hidden anything with him. It helped us to build a strong and faithful husband-wife relation. We are leading a happy life with some restriction for spending money for me.

  8. Diane on September 4, 2012 at 6:04 am

    My husband and I are in different tax brackets and for that reason want to make sure that there is no possible way that the government can decide that my income should be attributed to him. We maintain a joint account which transfers money automatically from each of our accounts on the first of the month. These amounts total enough to pay for all house expense and an amount to pay for vacations. All investing and personal spending is done from our individual accounts. This maintains separate records for the government and allow each of us the freedom to spend on items the other might not think a good choice, for example if my husband wants to spend $500 for a new baseball bat and he has that in his individual account, there is no argument from me even if I can’t see the value in the purchase. We have been together for 18 years and have never had an argument related to money. This has worked extremely well or us.

  9. Sean Cooper on September 4, 2012 at 10:31 pm

    For adults on their second marriage I think it’s harder to blend finances. With all the financial baggage – separate kids, alimony, child support, previous debt – it can be difficult to get on the same page financially. I think having separate accounts works best, while sharing expenses. It can help avoid a third marriage.

    • Nadine on September 15, 2012 at 10:17 am

      I understand what you mean. My husband came with enormous baggage from his first marriage and insisted on a separate account. Over the years we have built up a lot of trust, even though he keeps a separate account I look at his statements. As long as I feel in the loop I don’t need access to it.

      It took a couple years before we were both comfortable about how we manage our finances and working in the same direction.

  10. Kristina on September 5, 2012 at 5:24 pm

    We each have our own separate accounts (and we each earn enough to support the family if need be), and we also have a joint chequing account where all joint expenses are deducted from. We will soon have a joint credit card that will be used for family purchases – and will deduct out of the joint account. Each month we transfer identical amounts into the joint account – I reexamine this amount regularly based on our bills and adjust if need be.

    As for our personal accounts – it covers personal gifts/clothes/eating out/vacations(and joint vacations)/RRSPs/Savings. I’ll track expenses for a few months every once and a while to make sure we’re on track – but mostly if the RRSPs/TSFAs/Emergency fund/mortgage pre-payment is maxed out we let the spending take care of itself, and discuss any major purchases. At the moment our incomes exceed our lifestyle – so it’s all pretty straight forward.

  11. W at Off-Road Finance on September 9, 2012 at 9:14 pm

    My wife and I have fairly separate finances, but I don’t think it’s really an ideal situation. It’s just how things have worked out.

  12. James on September 18, 2012 at 1:46 pm

    My wife handles all of our finances. I barely even see my paycheck (I insisted that I get a paper check instead of direct deposit just for this reason). But this is because when we got married she said that she hated doing the dishes more than anything and I saw an opportunity. I offered to do the dishes if I could have nothing to do with the money. It has been that way ever since. Sometimes there are hiccups, but I can’t get too mad because sometimes there are no clean spoons.

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