To share, or not to share? That’s the question couples ask when it comes to bank accounts.
“Among US couples who are married, in a civil partnership or living together, 43% have joint bank accounts,” Bankrate reported. Meanwhile, “many couples (34%) have a combination of joint and separate bank accounts, while 23% have completely separate accounts.”
With any of the above arrangements, there are pros as well as cons. You’ll want to weigh the benefits and drawbacks of each to determine if sharing a bank account is right for you and your partner.
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What are the arguments for a shared bank account?
“Traditionally, couples are expected to keep their money in a joint checking account,” U.S. News & World Report points out, “and many financial professionals say this arrangement creates trust between couples.” together as they mix their lives with finance and assets.”
In addition, having all of your assets in a shared account makes it “easierto measure the overall finances of a family,” which helps with budgeting, and also simpler to “plan and pay for expenses,” especially those shared, per US News and World Report.
Additionally, having the names of both partners on the account ensures that they can both access the funds at any time. As US News & World Report says, “if only one person’s name is on an account and that spouse is injured or sick, their spouse may not be able to get the money needed for medical expenses or other fees.”
What are the benefits of keeping separate accounts?
There are also definite advantages to separating things. For starters, Bankrate emphasizes, “separate accounts can prevent uncertainties about each other’s spending habits that can occur in a joint account.” If each partner still has their own account, “they each have full control over their money and don’t have to review statements to see who spent what,” which gives a sense of “monetary freedom ,” per Bankrate.
As people increasingly delay the tradition of marriage, it may also be reasonable to question traditional financial arrangements, as a late union may have different financial implications. According to TIAA“anything you’ve had while single […] is not considered marital property, so it doesn’t make sense to combine it into a shared account.” This applies to savings as well as debts, such as student loans or child support payments.
Finally, keeping your own accounts forces you to stay on top of your finances, rather than letting someone else handle everything, and also provides security if your happily ever after doesn’t go as planned. as The Rise, A Motley Fool Servicesays, “keeping your finances separate and having at least one individual bank account can give you an extra layer of security if you separate in the future,” as it provides a way “to escape a situation that is no longer good for you.”
Are there other solutions to consider?
Of course, you don’t have to put everything together or keep everything separate – there are solutions that meet somewhere in the middle too. As Bankrate points out, couples “can easily use a separate account for their personal spending and a joint account for their joint payments, such as rent or a mortgage, maintenance children, utilities and more.” This allows “you and your significant other to enjoy the benefits of two accounts, such as joint bill payments, without worrying too much about differences in spending habits,” according to Bankrate.
In fact, according to US News & World Report, this happy medium may actually be “the best way to manage your money in marriage.” But as with any strategy, there is some legwork required here to make sure everything goes off without a hitch. Agree on how much you put into joint versus separate accounts each month, and be sure to “create a mechanism, such as a power of attorney legal document or transfer provision on death, that allows each spouse to access money in different accounts when one person becomes infirm or dies,” advises US News & World Report.
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