ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Holding Your Own Financially Gives You Power

Updated on July 21, 2016

Should Married Couples Have Joint or Separate Accounts

When two people become married, after the excitement of the wedding ceremony, they confront a myriad of financial choices and decisions. One of the main conversations you should have as a couple is how to handle money, because navigating this somewhat sensitive issue is important because financial problems can strain relationships to breaking point and have been cited as a major cause of divorce. How much debt are you bringing to the marriage? Many people do not discover the full extent of their spouse’s financial obligations until they are married. Debt brought into the marriage can be a major source of strife if not well handled. Having joint finances with someone who has a history of bad debt may affect your credit rating.

One of the main conversations you should have as a couple is how to handle money. While some couples feel that marriage is a partnership in which everything should be shared, including bank accounts, others value their independence highly. There are no hard and fast rules about the best type of account. Whatever works best for both of you as a couple should prevail. Before you get started, try to understand each other’s approach and attitude to money. This will help you identify areas where you agree or disagree so you can spot potential problems that could arise.

Advantages of separate account

Separate accounts allow each the ability to retain some independence; this it is suggested could actually strengthen a relationship. With individual bank accounts, you don't have to feel guilty about spending. If one of you isn't earning – perhaps because you're staying at home to look after young children or caring for an elderly relative – you could both keep separate accounts and the earner pays their partner an allowance. It should not be seen as a favor, but a necessity. The main earner can transfer an agreed amount each week or month to their partner's account. You can both decide on what the money should be used for..

Disadvantages of Separate account

Some couples that keep separate accounts assign expenses –you pay the rent and school fees, whilst I’ll pay for groceries, utility bills, and so on. One of the couple might fail to meet up his/her own responsibility.

Advantages of joint account

Joint bank accounts are easy to use because either spouse can access the money at any time to make payments. Even though both of your names are on the account, you don't need written permission from your spouse to access the account. This can be particularly helpful if one spouse is out of town. Having your assets in one joint account can also make your financial lives simpler, as you do not have to track multiple accounts. A single joint account eliminates the possibility of having too much money in one account and not enough in the other when you need it, reducing the chance of an overdraft. Having a joint account with your spouse can make estate planning easy if you intend to leave all your assets to your spouse.

Since most banks now charge monthly service fees, the fewer accounts you have, the smaller your fee expense. Money, money is easily pooled together, particularly that spent on shared expenses--housing, utilities, groceries, and perhaps the car(s). Doing so not only gives you more of a sense of togetherness but also makes keeping a record of these expenses much simpler.

However, you’ll need to be clear on what you consider to be a fair contribution and stick to it. Will you both contribute the same amount to your joint account, or will you pay in based on your relative earnings?

Disadvantages of joint account

Managing your money together when you’re in a serious relationship can be tricky. You’ll always have some personal goals that don’t align with those of your partner. In relationships, there may be different goals and priorities. Everyone needs some personal spending money that doesn’t have to be accounted for. The amount will vary depending on your resources and lifestyle.

One of the advantages of a joint account is that you might not always know what is in the account. Your partner could overdraw the account without informing you. If you’ve got a lot of money in savings, you might want to open a joint savings account where you’ll both need to agree before any money can be taken out. This is a good safeguard against one person dipping into the savings without discussing it with the other first.

If things turn bad in your relationship, your partner has the ability to clean out the account and take all the money, even if it was deposited by you. A joint account also prevents each individual from building up his or her own credit.

If you intend to leave your money to a different beneficiary, when you die, such as to a child from a previous marriage, joint account could make it difficult, because the money automatically becomes that of your spouse. Even if your will directs your money to a specific beneficiary, any assets held jointly will transfer according to the laws of joint tenancy, rather than your will.

When you open a joint bank account you’ll both be responsible for any debt or overdrafts so it’s vital to trust each other when it comes to money and decision-making. Avoid a situation where one of you is in sole control of the money. You should make sure you both have a good understanding of your financial situation. Teamwork is essential and shared duties work well for some families, but even if one party is more involved, both should have a general overview of the total picture. Periodic meetings are important so you know where you stand financially and can see whether you are actually moving closer toward your family goals.

Hybrid system

In this arrangement, partners contribute a certain amount of their monthly salary into the joint account to cover routine household expenses such as mortgage, food, utility bills, and so on. On the side, you each keep a separate account for more personal expenditures, such as clothing or entertainment. One of the negatives of this arrangement is you have to agree on an equitable amount to put in the joint account and how it will be contributed, whether it’s 50/50 or related to the size of your income. If one spouse earns more than the other, this could be a source of conflict.

Conclusion

There are advantages and disadvantages to joint accounts, and there are no hard and fast rules about the best type of account, the answer depends on several factors. Among them are how you and your spouse feel money should be handled, your respective spending and saving habits, and whether there are any reasons to keep your money separate. Many couples find that the best solution is to have a joint account in addition to each keeping an individual account. What’s most important is honesty and communication. Any system in which the partners are open about their money habits is a good one. With careful planning, clear communication and compromise, many frustrating conversions can be avoided and conflicts resolved. Periodic meetings are useful to review bank balances, any outstanding debt, routine expenses as well as any major expenses that need to be carefully planned for. However, holding your own financially gives you power.


Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)