Apr 3, 2020
By Mariclare Cranston, Content Specialist

Should you and your spouse or partner keep your money separate or combine accounts?

Ah, the intertwining of finances! Of all the complexities of a relationship, this is perhaps the most delicate. Should you and your spouse or partner combine accounts into a joint checking account? Or should you keep them separate? To answer that, let’s look at the top three pros and cons of establishing a joint account.
 

Here’s why you should consider a joint checking account.

1. Combining accounts has a certain symbolism

While symbolism may not be a financial benefit, the act of joining accounts can signify a true partnership for some people. And this cementing of the relationship helps foster a sense of trust. In fact, Phys.org reports that couples who pool their finances tend to be happier in their relationships.

Is building this sense of togetherness by combining finances going to be an important step for you and your partner? Work together to understand how you both feel before making any decision to combine accounts.
 

2. Combining accounts provides convenience

With a joint checking account, you will both receive a debit card and checks, making everything from grocery shopping to paying bills a lot easier. In addition, you will both have access to any Online Banking or Mobile App that the checking account includes, which is essential for transparent money management.

Pro Tip: There are state laws that may impact how the money in your joint checking account is handled if your spouse or partner passes. Talk with your financial institution for a full understanding before opening a joint account.

Because you can both access the funds any time you want, it will be important to have a clear understanding of your financial goals, both individually and as a couple. It’s easy to assume you’re both on the same page but having that conversation regularly will help avoid miscommunication and financial misunderstandings. 
 

3. Combining accounts makes some legal issues easier to navigate.

Opening a joint account may make some legal matters easier to navigate. If your spouse or partner passes away, you will retain the funds in a joint account without having to go through the estate settlement process. Funds in an individual account, though, will not automatically go to the surviving partner. It’s critical to understand your financial institution’s policy as well as any government regulations about how funds are disbursed.

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Here’s why you should consider keeping your accounts separate.

1. Combining accounts may lead to a perceived loss of independence.

For many people, financial independence is a source of pride, and they view losing that independence negatively. Additionally, Business Insider notes that millennials are waiting to get married until they’re older and have established themselves financially. For those who are committed to individual financial security, combining assets with their partner may feel forced and unnatural.
 

2. Combining accounts with unequal assets may make partners feel uncomfortable.

Partners are not always entering their relationship on equal financial footing. Some people are paying student loans, trying to pay down credit cards, even carrying a mortgage when they enter a relationship. When one partner has substantial debt or a lower income, it may make that person uncomfortable about combining assets into a joint account. Their partner, on the other hand, may feel resentful about now taking that debt on.

Furthermore, if one partner faces potential wage garnishment, the funds can be taken from a joint account. This, too, can create resentment. The successful combining of assets requires honest conversations about each partner’s financial situation.
 

3. Combining accounts can be a nightmare if the relationship ends.

No one likes to think about those “what if” situations, but if you have a joint account and the relationship ends, it is important to remember that both partners will have access to the money. This opens the possibility of one person withdrawing all of the funds without the other’s knowledge and before any agreement can be reached. Additionally, if divorce proceedings are required, splitting the funds in a joint account can become bitter.

 

Here’s a solution if you’re not sure whether to open a joint account.

The good news is this doesn’t have to be an all-or-nothing decision. In order to foster a sense of partnership and also maintain individual financial security, many couples opt to combine some of their assets into a joint checking account and funnel some money into their individual accounts. This allows transparency in financial matters but allows each partner to manage their own independent budget.

Like any major financial decision as a couple, this is a decision that should be made together; according to a recent poll by CreditCards.com, 27% of those surveyed felt that hiding money was worse than physically cheating.

Need help moving some or all of your payroll direct deposit to your new joint account? Download our Switch Kit!

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Whether you and your partner are going to open a joint account, maintain separate accounts, or something in between, the key to financial success in your relationship is communication. It’s critical that both individuals are clear on each other’s financial goals and financial struggles. This should be an ongoing discussion; while having financial conversations can be difficult and even embarrassing at first, establishing the ability to discuss spending habits, budgets, fears, and ideas will help you build your financial security as a couple.

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