Should Couple Have a Joint or Separate Accounts

Should Couples go with Joint or Separate Accounts?

I found this video of Suze Orman aka the “Money Lady” where she proclaimed that after over twenty years of couple bliss with her partner that they don’t have a joint bank account.

She can’t be too far off here; per a TD Bank survey, 42% of couples maintain a separate bank account. The main reason cited in the survey was independence.

How Should Couples Organize Finances?

After watching the video, what do you think? Do you agree or disagree with her position on this matter?

My first impression was that I agree with her methodology on how to handle the allocation of shared expenses. In that, I do believe that if couples do choose to have separate bank accounts using a percentage as a basis is logical as well as fair.

How Does this Splitting of Expenses Work?

For example, let’s say that Person A of the relationship makes $75,000 and Person B makes $50,000 for a total income of $125,000. For purposes of this example, that amount represents net income after taxes.

That would mean that Person A is responsible for 60% of the bills while Person B is responsible for 40% of the bills.

If Person A and Person B have bills totaling $9,000 per month that would yield the following allocation:

Person A is responsible for $3,600 of the bills and Person B is responsible for $5,400 of the bills. These amounts represent the exact percentage of how much money each person will place into the pot.

Had the amounts been in line with each other 51% vs 49%, I would just go with the 50/50 split. 

A decision would have to be made to handle all residual amounts of $1,416: Person A has $567 and Person B has $850.

Now here’s where it gets tricky. Where do you park the money? Do you open up a joint account as the middleman to handle the $9,000 or do you in essence set up an invoice style type system?

The Case for Separate but one Joint Account  

In this scenario, both parties maintain their separate bank accounts but open a joint account to organize finances. Everything is down the line per the percentage allocation. Both parties transfer funds from their separate account to the joint account. The frequency should be decided upon based on the payment due date.

In this scenario, the couple agrees to appoint Person A in charge of the finances. Someone has to be in charge of the actual bills, right?

The rub here is that this goes against Suze’s recommendation to not have a joint account period. Let’s take a look at how she would handle it.

The Case for Separate with no Joint Account

Here both couples maintain their account. Person A requests Person B’s portion each month and pays all the bills. That sounds easy enough, right?

Out of the two, I prefer the first option. Why? Because I believe it sets up better money habits. Here, you are giving the other person partial responsibility. They know that twice per month, they need to fund the joint account.

In the other option, I feel as though the other person is a passive participant. I wouldn’t want to set up a situation where laziness sets in and there is a collector-type vibe. Research has proven time and time again that the number one reason couples fight is over money issues.

The Case for the Joint Account

UCLA conducted its survey and they concluded that couples were happier when there was only one account. I understand how one would come to that conclusion but…

How Do I Really Feel about all this?

I am an old fashion gal. I believe in romance even though nowadays, I don’t see any point in the big wedding. A small one would satisfy my palette. I believe one account is good for couples who start from ground zero. From Scratch. In this type of situation, both people are growing and learning together. There’s no power struggle. It’s all about teamwork.

Let’s go back to Suze, I did the math and it appears she was in her late forties when she entered her current relationship. That is about the time in a woman’s life where they find themselves in that if it isn’t broke don’t ask me to fix it mode.

As a single woman, I can yell from the mountain tops that I in fact reside in that same mode.

Don’t get me wrong, I’m not saying that one should never have a joint bank account with their partner but for me, I can’t sign off on it at this point. I’m too independent. If I were younger, I would have followed the traditional path just like my parents.  

The bottom line…

Have an honest discussion with yourself and figure out what mode you fit and do what’s best for the both of you as a couple. Will it be a joint account with separate accounts? Two separate accounts? Maybe the happy-go-lucky single account is the way to go. Whatever it may be may be…it all boils down to the mechanics of money management.

As long as both parties are working towards a shared goal and there is an open line of communication it will lead down a path to happiness as well as to success.  

Tell me: which one would you choose?

BGMD Editorial Team

Teigh Reed is the Content Editor for BGMD. I have a passion for all things finance-related. I'm on a mission to pay forward my knowledge of money and to cheer on your accomplishments. What's on your money mind? I'm listening.

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