As two people get married, the concept of money is generally altered to some extent. When most people are single, they learn to take care of themselves; they pay their own bills, buy their own food and clothing and take care of their own expenses using their own separate accounts. This can be difficult at times, but this is what the majority of us are used to. After we meet someone and end up getting married (or common-law), many people end up getting joint accounts together in order to pay the bills easier. In this article we’ll go through the pros and cons of getting a joint account after you’re married as well as the pros and cons of getting separate accounts.
Joint Accounts
Many couples choose to join all of their accounts and simply pay their bills and mortgage(s) from one joint account. They put both of their pay checks into this account and both individuals have access to this account to pay any expenses which may come up. Some couples have more than one joint account for particular reasons; for example, a couple may have a joint chequing account for bills and other day to day expenses and then another joint savings account for emergencies. Most couples who deal with joint savings accounts also have joint investment funds and work toward their future together.
The pros of having a joint account is that essentially you are working together with your spouse to take on any expenses as a couple. There are no secrets as to where the money might be going since both parties have full access to all the finances. All the money made by both couples goes into one account and the couple can decide together what needs to spent on what and how much money they have together to spend on miscellaneous expenses. This may result in a more communicative relationship and the couple may be more inclined to work together to save and spend since everything is going into and out of only the one joint account. Having a joint account may also be the best idea if one partner is making the money and the other partner is staying home with the children.
The cons of having a joint account is that there may be some issues down the road if one person makes substantially more than the other or the couple isn’t on the same page about budgeting and spending. It can also be difficult if one person already has outstanding debts before the joint account; this means that the other person will have to use their money to help pay for the other’s debts, loans etc and this may cause some tension as a result. Another con is that it may be difficult to surprise your partner with gifts if all the money is coming out of the one joint account anyway. And if all the money is in a joint account, it may also be much more difficult to divide up if a divorce or break-up occurs.
Separate Accounts
Some couples may choose to keep their finances separate from their love life and use separate accounts as a result. They both keep their own separate accounts before marriage and end up paying for things as they have before they merged together. Couples who have separate accounts each pay from their own accounts and take care of their own finances and credit scores.
One of the pros of having separate accounts is that you can both still maintain your individuality. You don’t have to feel like you are leaning heavily on your partner or that you are fully supporting your partner. You only have to deal with your own financial issues. This is especially popular with many common-law relationships since they can still buy whatever they like and simply co-habit together instead of sharing everything. Keeping your accounts separate can help you keep your freedom since you can still buy whatever you like whenever you like and not have to worry about couples budgeting since you’re only using your own money. As long as you have enough to split the bills at the end of the month, you get to maintain your own money. Keeping your accounts separate is also a good first step in becoming independent on your own before deciding to be interdependent later on so having separate accounts could always be a starter step before merging the accounts together.
One of the cons of having separate accounts is that if an unexpected expense comes up, you only have yourself to fall back on. For example if you were going back to school, or on maternity leave, or suddenly unemployed, it may be difficult to come up with your half of the bills. Another con of separate accounts is that if one person makes substantially more than the other person and the bills are still split 50/50, it may cause some tension in the relationship. Since each partner is fully responsible for his or her own financial well-being, having separate accounts can make the relationship may feel much more like a roommate situation than a marriage or common-law partnership.
Joint Accounts and Separate Accounts
The last choice that some couples end up doing with their finances is having both a joint account and keeping some separate accounts. This way, they get the best of both worlds and can use a joint account for bills and trips etc, while they use their own separate accounts for their own personal items and surprises for their partner. Many couples end up getting a joint chequing account for any bills to pay together and a joint savings account for larger savings such as a down payment or a retirement fund and still keep their separate credit cards for their own personal spending.
One of the pros of having one or two joint accounts and the rest separate accounts is that you can still maintain some of your independence while still being married or common-law together. This way, you can still focus on your future together, pay for things together, but you have just enough freedom to keep things interesting if you want to do something without your spouse such as surprise him/her with tickets to something or buy a nice gift for yourself. Having one joint account and one separate account also alleviates any tension about any debts or loans the individual has had prior to getting married. This way, they can still work on their debt without it affecting the marriage and finances very much.
One of the cons of having separate accounts as well as joint accounts is that it can become a hassle trying to keep track of them all and can get very confusing unless you have an excellent bookkeeping system. It can also be a constant hassle to remember to transfer money from your separate account to your joint chequing account each month in order to pay the bills. And with all the bank accounts sitting around, the monthly banking fees can really add up.
Joint Accounts vs. Separate Accounts – Conclusion
The truth is there is no right or wrong way. Each individual is different, just like each couple is different so there is only the way which works for you. For some people, a joint account would be perfect and some other couples prefer to keep their finances separate with their own separate accounts. Still others find that a good mix of both joint accounts and separate accounts work best for them. It really all depends on your particular situation and what you are going to be spending together and what you are going to be spending separately. As you get married and decide to live your lives together, maybe a “bill payer” will be delegated. For example with my family, my parents only had a joint chequing and joint savings account because my dad was delegated to pay all the bills and my mom didn’t want to deal with the finances; it was mutually decided that my mom would take care of the kids while my dad would make sure the bills were paid.
For some, tradition and religion may end up playing a particular role in deciding as well; some people tend to be more “modern era” where everything is split down the middle and men and women can equally take care of themselves and should pay equally (as a result, separate accounts generally work best in this situation), and some people tend to be more traditional where the woman stays home with the children and the man provides for the entire family (in this case, a joint account would probably work best). Others tend o be a mix of both modern and traditional and opt for having both a joint account and separate accounts. This is why each specific couple, each situation should be tailored to meet your financial needs. Remember, there is no right or wrong choice; there is only what is right for you as a couple.
The image used in this post is taken from Image: photostock / FreeDigitalPhotos.net
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