Buying a house and bearing children are not the only huge steps a couple can make. They also need to seriously rethink their finances. Will you divide the burden with a joint bank account, or will you split the expenses and keep your own? How can you prevent senseless arguments over money? A successful relationship handles the topic with extreme care (and caution). It all hinges on honesty, transparency, openness. Anyway you want to phrase it, a happy couple shares everything, and financial planners often encourage communication about monetary ambition.
What a joint account provides
Studies show that when you pool finances, you relieve a lot of stress in your marriage. Research even points out that keeping a percentage of each paycheck for yourself makes you no happier than relinquishing the whole amount. The same study proves income keepers experience less satisfaction overall than their joint asset counterparts. Do you really want to treat your spouse as a college roommate?
Individual bank accounts
From personal experience, I recognize the issues this causes. As newlyweds, my husband and I still utilize our pre-wedding bank accounts and split the bills as we did when we first moved in together. However, things get tricky now that we bought a house and are expecting. Over the course of two months, I paid $4,000 for the furnishings in my living, dining, and son's bedroom. A month later, my husband put down a comparable amount on air conditioning maintenance in one swift payment. He asked me for help, and I immediately jumped to my own defense. How could he, after witnessing (and reaping) the benefits of my spending, ask me to apply the rest of my spending cash towards this? Shouldn't that be his responsibility?
Situations may differ depending on the couple, but misunderstandings arise more often -- especially when you don't have a financial background readily available. Every couple experiences an earning disparity where one partner brings home more than the other. With separate bank accounts, you may feel that your partner is not pulling their weight or vice versa. You have no way of seeing where their money goes and does not reinforce trust.
Joint accounts are not for everyone. Reasons why you should keep your own:
- You feel uncertain about the future of your relationship.
- You do not agree on financial goals.
- Your partner is financially irresponsible or in severe debt.
- You display incompatible spending habits.
- You own substantial assets and did not sign a prenuptial agreement.