When Andrea and I got married in 2008, we opened up a joint checking account together.
Both of our paychecks were directly deposited into the one joint account and all of our expenses came out of the same joint account.
This is how we have handled our finances since day one and we both couldn’t imagine doing it any other way.
But what about those who don’t share money in a marriage (or relationship)?
When I first started teaching personal finance, I had my blinders on. My focus was showing people how to create a simple budget, save more money and pay off debt.
One of the very first couples I started money coaching caught me by complete surprise: They had completely separate bank accounts!
Over 40% of married couples today have separate bank accounts.
Should you combine your finances?
My humble opinion – absolutely.
But, let me also tell you why I think it is so important.
Early on in our marriage I thought buying flowers for my wife would make her happy. However, her love language (per Gary Chapman’s The Five Love Languages), is acts of service and words of affirmation – NOT gifts.
Full Transparency is Good for Marriage
I’m not saying you have separate accounts because you are trying to hide anything from your spouse, but it could appear that way at no fault of your own.
If you’ve been married long enough, you know by now that communication errors between the two of you happen and when you take the 30,000 foot view of the disagreement, it’s often hard to pinpoint who was at fault.
Here’s an example:
The point of this example it wasn’t her fault or my fault – rather it was a simple misconception between us.
When you have SEPARATE accounts, there will be an increased chance for misconceptions.
Maybe you notice she’s wearing new clothes and you start wondering how much those clothes cost.
Then you start going down the rabbit hole of why she is spending this money and why she didn’t chip in more for groceries last month.
Oh, I see…your expensive clothes were more important that food for our family.
Then resentment starts to creep in and all of a sudden she starts asking why you’re so quiet.
And then she starts thinking that you’re hiding something and this is why you’re so quiet….and as you can see this plays out like a dog chasing it’s tail.
If there was one joint bank account, they could simply login and see you didn’t buy those expensive clothes.
They were free because you signed up for a free trial at Rent the Runway (place to rent designer clothes). You didn’t spend any money at all!
What Happens if the Unthinkable Happens?
Like I said above, Andrea have always shared one bank account since we said “I do”.
However, it wasn’t until a few years into our marriage when we sat down with a financial planner and he started asking questions about the finances.
I was quick to have all the answers and I will never forget when Brent (the financial planner) told me to stop answering all the questions because he wanted to see what Andrea’s response would be.
Andrea already knew about every transaction in our lives (she could see them), but she wasn’t quite sure how it was all managed. She knew how much money there was in our lives, but didn’t know where it all was and how to access it.
When Brent asked me why she didn’t know where everything was as, I replied with the obvious:
“Well, she can just ask me and I will tell her”.
Then Brent said,
“But what if you’re not around to tell her?”
Houston, we have a problem here.
He was spot on.
None of us know what today brings, right?
Also, I know the fact that you’re reading an email from me tells me that you are the one in the relationship who is the manager of the money.
Even if you currently share finances, something tells me you do most of the handling of the finances.
Am I right?
What happens if you’re not around to show you spouse the money stuff?
Can you imagine the stress you are going to add onto your spouse if something happens to you AND they have no idea how to get into any of the finances in your lives? Don’t let this happen. It’s time to start sharing the money.
You Will Share a Bed, But Not a Bank Account?
I stole this saying from One Bed, One Bank Account: Better Conversations on Money and Marriage by Carrie and Derek Olsen.
Let me ask this: are we really willing to share a house, kids, grandkids, a bed, and everything else – but not a bank account?
Food for thought.
Create Goals, Build Dreams and Plan Your Future
Money touches every single aspect of our lives. Everything.
You and your spouse should sit down together and create your goals, build on your dreams, and plan out where you want to both be TOGETHER in your future.
And guess what?
These dreams, goals and plans will depend on money at some point. Money doesn’t just buy “stuff”, it also buys your time and freedom from a life of working.
Sure, it may work to dream big and plan out goals with separate bank accounts, but how much easier will it be when the dreams and goals go from his and hers to “ours”?
5. Budgeting is SIMPLE with One Bank Account
Since 2015 I have helped over 1,000 families create a budget and some of them refused to combine finances into one account. So we built their budget with separate bank accounts.
One bank account would pay for the mortgage, the other bank account would pay for groceries. She would buy gifts for the kids at Christmas and he would then transfer money from his account to hers.
Then she would have to add this in as “income” into her budget but then offset it with the 50% she paid for gifts. Then there was a copay he paid at the doctor for one of the kids but since she had the health insurance, they had the discussion if it should just be a wash.
And, she made more than he did (by quite a lot) and he didn’t think it was right that the spending was 50/50 in terms of amount but not a percentage. We decided to give the 50% rule a try instead of splitting the dollar amounts down the middle, but now we were having to get a calculator out to figure out how much each would pay and if that would include overtime he qualified for.
Finally I said: This would be so much easier if we just had one account.
They tried it and it blew their minds — so much simpler!
3 Tips for Successful Combining of Finances
If you don’t currently share money and you’re thinking of giving it a try, I can already feel your nerves about it. I one hundred percent get it – if it were that simple you probably would be sharing money by now, right?
Here are a few tricks I have seen work over the years when couples make the move to start sharing money.
1. Fair and Equal are Not the Same Thing in a Marriage
This is just my personal opinion, but women spend more money frequently but men spend even more money a few times per year. My wife will spend about 98% of our “Department Store” budget each month.
Because I can wear the same clothes for 10 years and still like them. She cannot.
On the flip side, I will spend thousands of dollars on a new camera, a new tool, or a new grill – and this happens maybe 1-2x per year.
She probably still spends more money than me, but then again I didn’t have to push two kids out my belly after 9 months of back pain and 24 hours of labor.
Fair and equal are not the same thing.
2. Baby Steps to a Shared Joint Account is Okay
Many couples have a separate bank account because there was some financial issues in the past and trust was lost.
If this is you, then of course you are hesitant to move all the finances back together and you have every right to feel this way.
In this situation, what if you took a graduated approach to combined finances?
Maybe start with giving login access to each other’s accounts or sharing bank statement with each other?
Get everything out in the open – the good, the bad, and the ugly.
Once this has been accomplished, next open up a joint account and slowly start combining finances to it.
Maybe the first month the account is just for the mortgage and you equally fund it. Then next month you move into groceries, bills, etc.
Over time of the transparency, it will become easier to combine finances versus the ripping the bandaid method.
3. Don’t Let Amounts Get in the Way of the Finances
Chances are you both don’t make the same amount of money.
Maybe one of you works full-time outside of the home for an income and the other works full-time inside the home without an income.
The point is both of you are necessary and both of you contribute to the income – either directly or indirectly.
For years, Andrea made way more money than me.
She was a television news anchor and I was an entry level firefighter. One thing we did really well is we made sure to never call it her money or my money – it was OUR money since it was in OUR bank account together.
Also, remember tip #1: fair and equal are not the same thing.
One of the saddest truths of today is that 50% of marriages will end in divorce. The #1 cause of divorce in North America is infidelity.
The #2 cause of divorce in North America is money problems and money fights.
I tell all newly weds I meet with that marriage is WORK and it’s 100% worth it. And, if you want to give yourself a giant advantage in a marriage/relationship – then combine the finances.
By doing this, you are essentially removing the #2 cause of divorce today!
Do You Share a Bank Account?
If yes, why?
If no, why not?
I would love to hear from you! Leave a comment below and let us all know your thoughts or ideas on one bank account verus separate bank accounts.
God bless and thanks for reading Money Peach!