Psst, I make money on some of the links in this post at no cost to you. It keeps the lights on around here.
I was challenged to write this post by PeerFinance101 during FinCon as part of their pro / con debate series. My article is about the pros of joint financial accounts. Leave your thoughts in the comments to keep the debate lively!
Getting married was one of the best decisions I ever made. Well, the wedding itself was one of my costlier money mistakes, to the tune of $6,000, but it was still fun.
The actual act of marriage and building a home together was one of the best things I’ve done. Although it was one of the best things I’ve done, it didn’t come easy. There are so many variables to think about when you’re married. It’s not all about you any more! I shifted my verbiage from “me” to “we” as we navigated what it meant to be a Joint legal entity.
We also had to figure out our finances.
To me, joint finances seemed like a no-brainer. That’s the example that was set by my parents and it seemed to work beautifully. But nowadays many couples opt for separate finances because it works better for them. And that’s completely fine!
Here’s why joint finances made sense for our situation.
The advantages of joint financial accounts
It’s important to explain my view on marriage before I get into the advantages of join accounts. To me, it’s a lasting bond, only to be broken in extreme cases. I feel that married couples operate on a joint, unified front in all things, and that includes managing their money.
Do I think joint finances is what everyone should do? Of course not. Couples need to do what’s best for them. Here’s why joint finances works well for us.
Everyone knows what’s going on
People sometimes prefer separate finances because they don’t feel like they have to justify their spending to their partner. To some people, it eliminates financial infidelity because there’s no need to tell your partner where your money is going each month, as long as the bills are paid. Separate finances build a wall of privacy around your spending.
I still prefer the openness of joint accounts – when they’re actually open and honest, of course. I’m not a fan of people lying to their spouse about money. Honesty is the only way a relationship can work, both in the personal and financial spheres of life.
And you know what? This is something Mr. Picky Pincher and I struggled with when we got married.
When we combined our finances, I dumped all my money into our joint account and canceled my “single lady” account. Mr. Picky Pincher did the same, but chose to hang on to his old separate checking account. He felt self-conscious that I would be able to see his purchases.
He feared the judgment that came with it: “Why did you spend $50 on a Sriracha keychain?” I didn’t agree with this approach, but if that’s what made him feel comfortable, I shrugged it off.
Over time we got a handle on managing money jointly. Mr. Picky Pincher realized there wasn’t anything to fear. In fact, a separate “slush fund” was a headache for budgeting. He closed the account and all expenses come from our main account now.
The big, big key here is to be kind to your partner. Be understanding. Try not to be quick to judgment when you see a $20 charge here and there for something.
Here are some quick tips to deal with financial infidelity.
The kid question
There’s no question: it’s ‘spensive to have a kid.
With joint finances, there’s no question about how we’re paying for our future children. We don’t have to keep score on who has spent what on the kid because our money is, well, our money (not my money). All expenses will come out of the same account we’ve been using for years. There’s no fuss over how we cover child costs.
For separate accounts I would think you’d have to both dump money into a joint account just for child expenses. To me, it seems like it would get super messy to keep things equitable.
Of course, if you choose not to have kids, this problem fixes itself!
Joint finances has let us streamline our financial lives significantly. We share our financial accounts. There’s no need to create multiple checking accounts, savings accounts, or credit cards. We have one joint checking account, savings account, and one joint rewards credit card. I don’t have to juggle expenses each month or write Mr. Picky Pincher checks for bills.
We had to do this when we lived together but weren’t married yet.
We didn’t want to combine our finances until the ink dried on our marriage certificate. We kept our finances separate when we were engaged and co-habitating. It was annoying!
He paid rent and cable and I transferred money to him each month to pay for half of everything. It felt like an endless game of getting even and making things fair. We even split up our groceries while shopping! I paid for half the basket and he paid for half.
The cashiers loved us, I’m sure.
Joint finances have made everything so much smoother. There are no weird transfers, no dozens of accounts to juggle, or any kind of “get even” game. It’s just us and our money, as simple as can be.
Cohesive joint goals
In our finances there is no “Mrs. Picky Pincher debt” or “Mr. Picky Pincher debt.” It’s our debt. I don’t talk about when I’m going to retire, either – I talk about when we get to retire. We’re able to apply both of our incomes towards our goals for debt freedom and early retirement. We don’t argue over who contributes savings to which account because it’s all coming from the same bucket.
If we had separate finances, I think it would be a real challenge to tackle our joint financial goals. It would involve multiple bank accounts, lots of transfers, and things that frankly sound like too much work to me.
We’re lifelong partners, and that means we work on our goals together, or not at all.
The bottom line
Call me old-fashioned, but joint finances have worked splendidly for us. I
t’s stretched us and made our relationship much more caring and honest. Marriages and joint finances only work when you communicate and choose to be honest with each other. In fact, I’d say that joint finances have made our bond stronger. We’re able to operate as a unified front with no secrets.
But does this mean that joint finances works for everyone? Nah. I know several couples who keep their finances separate and it works great for them. At the end of the day, do what works best for your relationship.
We want to know: Do you have joint or separate finances with your partner?
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