The Pros and Cons of Joint and Separate Accounts for Couples
photo credit: Claire L. Evans
For people who are about to get married or set up house with their partner, financial arrangements are one of those unromantic topics that do need to be talked about. One of the biggest decisions is whether you’ll set up a joint account or separate accounts, and the Financial Planning guys at About.com recently had some thoughts on the pros and cons of both sides of this decision.
Having Just One Joint Account
From an organizational point of view, having just a joint account is obviously the easiest way to go. Both incomes go into the same place and all bills are paid out of it. But there are potential problems - neither partner then has effectively “their own” money, and if one partner earns significantly more, or one partner tends to spend a lot more, there is the potential for conflict. If you decide on a joint account then make sure you talk through all these issues first.
Separate Accounts - and a Joint Account
The other easiest alternative is for both partners to keep their own separate account, but also open a joint account for household expenses and rent or mortgage payments. Then it’s just a matter of deciding how much each partner contributes - the same amount, or an amount proportional to their income. You also need to have some guidelines about what can be paid for out of this account - probably sticking strictly to household expenses is the best.
Tags: Bank Accounts | Checking Accounts | Personal Finances | Saving Money
This entry was posted on Tuesday, July 15th, 2008 at 3:30 am and is filed under Kids and Family. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
