Should Couples Have A Joint Account?

We weigh in the pros and cons.
It's true that money can't buy love, but it's also one of the biggest causes of arguments between couples. As if spending decisions aren't complicated enough ("should we buy that stereo set", "how much loan should we take out on the SUV?"), try adding savings arrangements to the equation. One of the trickiest questions newlywed couples face is, should we have a joint account or keep our money separate?

There's no "right" or "wrong" way, say experts, but taking your money personalities and needs into consideration can help you decide which will work best for you as a couple. Two experts weigh in the pros and cons.

Joint accounts

The we-share-everything couple
Couples who pool their money in a joint account see this as a reflection of their marriage, and a sign of unity and trust. Sharing your assets sounds romantic, but it only works when you agree, for the most part, on how money should be spent and saved.

"Such a plan demands that newlyweds take care to communicate and cooperate about their finances, since they are depositing and withdrawing money from the same account," says Miriam Arond, co-author of The First Year Of Marriage. It also means that you have to respect each other enough not to grill your partner about every purchase that is made.

There's a biggie, though: If you and your partner have very different ways of spending money (for example, you're prudent and he's a spendthrift), your personality differences can create friction when one of you resent seeing purchases you don't approve.

And then there's the issue of income differences: If there is a big difference in income between you and your partner, this could lead to inequality in decision-making power, adds Arond.

Separate accounts

The independent couple
Keeping your cash in separate accounts doesn't mean that your marriage lacks commitment; it simply means you like the autonomy of managing your money as you see fit. You pay from your individual account for your common expenses, such as morgage, electricity, food, vacations -- either 50-50 or in proportion to how much you earn -- and what's left is used for your individual purposes.

The upside: "Having your own account, you may feel more independent, and won't have to worry about what your mate will say about your each and every purchase," says Arond.

This separatist arrangement, however, can make paying for your shared expenses a hassle. Plus, because there's less communication involved, it may delay your developing a joint financial plan. It also means you're less likely to have a clear picture of your partner's current financial status.

A combination of joint and separate accounts

The we-give-each-other-space couple
In this compromise arrangement, each spouse keeps money in both joint and separate accounts. The joint account is typically used for paying shared expenses (such as rent, electricity, food) while the individual accounts are meant for personal expenditures. Or it could be the other way, with the joint account being the mutual savings stash that each partner contributes.

The obvious advantage is that you're sort of able to have your cake and eat it, too: You can manage your personal funds independently, but at the same time you also get to work on money issues as a couple. The downside is that the more accounts you have, the more tedious and time-consuming it may be to keep track of book-keeping.

Also, if there's a large disparity in your take-home salaries, you'd have to work out what's considered a "fair" amount for each of you to contribute to the joint account: Personal finance expert, Jasmine Birtles, who runs money site Money Magpie recommends paying in a set percentage of your income for equality's sake.

Single-income couple

What if only one of you is earning? It's a bit more tricky but Birtles suggests that you can still negotiate an outcome that suits both partners. She puts forwards two main options. Firstly, you can pool together all of your money in the one joint account and use that for everything. Alternatively, the breadwinner can have his or her salary paid into the joint account and pay an 'allowance' to the other partner. If neither option seems right for your situation, sit down and talk about how you can work things so that you're both happy.

But no matter he's the breadwinner or you're both working, Arond has this advice for newlyweds who are just starting to work out their perfect account management: "Be prepared to undergo a period of trial and error before you land on just the right arrangement." Bottom-line: As long as you're willing to communicate and be open to each other, it needn't be as complex as it sounds.

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