Should You and Your Spouse have Separate Finances?
The American Dream is to find the love of your life, marry, pool everything you own as the two become one and live happily ever after. Alas, every marriage is not the American Dream. The love of you life may be a terrible money manager, owe a mountain of debt, or be a financial control freak. More and more couples are deciding that, while they love each other, joint accounts and finances are not for them.
Why Separate Finances Makes Sense for Some Couples
The rate of dual-income households has been steadily on the rise and the absence of a dedicated homemaker relieves the need to merge finances since both partners have personal streams of income.
More people are getting married later in life, meaning by the time many settle down with a spouse, their spending habits are deeply seated and individualized. Separate accounts eliminates have to seek permission for purchases and allows for independent choice.
Many previously divorced couples opt for keeping their finances separate because they may have been burned in their previous relationship. Their Ex may have left them with no money and a pile of debt. Maintaining separate accounts provides a sense of security and harmony in the relationship.
How to Make Separate Accounts Work in a Relationship
- Define Responsibilities. Divvy up expenses so everyone involved is aware of what they need to take care of. For example, one person may make the mortgage payment, while the other takes care of all the utilities and childcare bills.
- Create a Bill Paying system. Agree upon an administrative system for paying joint bills. This could include, for example, picking a particular date each month to transfer a set amount into a joint account that the couple subsequently uses for those monthly joint expenses like rent, groceries, utilities, and childcare.
- Account for differences in income. One spouse may make more money than the other, so it would be more equitable to divide your shared expenses according to a percentage of your incomes. So if one partner makes twice as much as the other, one would pay 1/3 of the shared costs while the other pays 2/3.”
- Communication is Essential. Having separate bank accounts doesn’t mean you should feel free to buy whatever or hide financial difficulties. Don’t keep financial secrets from your spouse. Talk about any personal situations that may cause you not to be able to meet your share of the expenses. Agree to discuss any major purchase over a certain amount.
- Monthly Check In. As a couple you will still have goals to save or invest for certain things such as a house, a big vacation etc. Additionally, you both will want the peace of mind knowing that all of the bills are paid. Sit down once a month and go over where you are in your bills and financial goals to make sure you on track.
Separate finances might provide each spouse some financial independence and may eliminate most financial arguments. Joint finances may allow each partner compete transparency and commitment to do it together. However you decide to manager you r finances, it takes a lot of up front planning and communication to get it right. The important thing is to find a system that both of you agreed upon, works for both of you, and supports a harmonious relationship.Learn more about our Couples Therapy Exercises