Pros and Cons of Separate Bank Accounts

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Should couples have separate bank accounts when married? Marriage is a significant life transition, often with many adjustments and compromises. For example, while some people expect to merge everything once they get married, including money, others prefer to continue having separate accounts. 

Having separate bank accounts gives you a sense of independence, self-identity, empowerment, control, and privacy over your finances. It’s how you came into your partnership, and it may make sense to keep it going, especially if you have to pay child support or have debts to clear. It’s also worth noting that separate accounts may protect you in case of a split.

That said, there are detriments to keeping separate accounts. For example, if you are incapacitated or in an emergency, your money is inaccessible to your spouse. Budgeting and paying bills are also much more challenging when you maintain separate accounts. 

A recent study indicates that couples that pool all their money together experience greater relationship satisfaction. Also, they are less likely to break up than those who separate all their money. However, marriage is complicated, and what works for one might not work for another.

If you maintain separate bank accounts, know that communication will be key. And that regular check-ins will help you stay aware of how well you are managing your spending and progress toward your shared financial goals. Consider the following pros and cons to make an informed decision for you and your family. 

Pros of separate accounts

  • You maintain autonomy: Most people marry after establishing their careers and accumulating financial assets. Given the hard work they have individually put in, it may seem unnatural to want them to join their accounts. Thus, separate accounts allow you to maintain autonomy or control over your money. 
  • Helps maintain privacy: People have different money personalities and preferences. Joining accounts means you will now have to be accountable for every decision because it affects both of you. For example, you will feel the pinch if one partner spends it frivolously. 

With separate accounts, no one else sees your spending habits and bank balance. Thus, nobody will scold or nag you for your choices. Also, compulsively monitoring your partner’s every transaction on a screen can get viciously addictive—separate accounts help you avoid resentment from building up. Ultimately, it’s better to separate finances than end the marriage down the road because of bickering over money.

  • Protection: Separate bank accounts means that you will not be burned by your spouse’s premarital debts or other payments. Even if your partner defaults on payments, your assets will remain safe when they face debt collection. 

There are horror stories of partners draining joint bank accounts when they break up, leaving the other broke and brokenhearted. Having separate accounts will ensure your protection from such heartless actions.

  • You get to keep your premarital savings: When you pool your financial resources, you merge everything into a shared account. Keeping separate accounts will mean you can keep yours. 
  • Allows for a simpler legal process in case of divorce: Keeping separate accounts will ensure your partner has less ammunition for money battles when you separate or divorce. Also, depending on state laws, you can keep all your money without worrying about it being divided.
  • You can meet different savings goals: We all have different goals in life. For example, while one partner may want to save for an MBA, another would rather save to start a business. Having separate bank accounts makes saving up to meet different goals easier.

Cons of separate accounts

  • It’s hard to get a clear financial picture: With separate bank accounts, it would be hard to gauge the overall financial wellness of your family. However, with a joint account, it is easy to see all your balances at a glance, making it easier to track your finances.
  • It’s hard to budget: The first step to creating a realistic budget is to assess your financial situation. If you can’t get a clear picture, then it’s already a problem. The second step is to set goals depending on your current situation, then track expenses before creating the final plan. 

When you have separate accounts, it will be hard to track spending to highlight areas of improvement. It will be even harder to track your household income. 

  • It can breed isolation: Some people may feel disconnected from their partners if their accounts are not merged. The reason may be that it signifies a high level of trust for some. As you grow in marriage and grow closer, agreeing to share incomes and expenses in the same account is exciting. If handled correctly, it can add another layer of unity to your relationship.
  • It makes the process of contributing toward shared goals harder.
  • It complicates your finances: When you share a home, paying bills and other expenses from one account is much easier. You don’t have to worry about who is taking care of what costs. Also, suppose one partner is facing financial problems, either a job loss or taking a break to have a baby and care for them. In that case, they don’t have to worry about not doing their share. 
  • Complex legal process: If one partner passes away or is incapacitated, you must go through a strenuous legal process to access their money. Having a joint account will make one less thing to worry about during such a sad and stressful time.
  • No financial transparency and accountability: If no one monitors your finances, you tend to spend them as you wish. Long-term, it can harm your family’s financial well-being. 

Is it good to have separate bank accounts when married? 

As much as there are good reasons for joining together your finances, there are good reasons for keeping them apart. What’s suitable for you depends on several factors. These include how much transparency you want and how much premarital payments, debt, saving, or investments you both have.

If you both want a joint account but have substantial premarital debts or savings, consider having a hybrid model. It will allow you to maintain separate bank accounts and contribute a percentage based on your income-sharing strategy to the joint account to cater to living expenses.

In the end, what matters is what works best for your marriage. The starting point is to have money conversations to set financial priorities together, understand each other’s values and aspirations, and where there are commonalities and differences. If you have trouble starting such conversations, consider getting the help of a financial planner. 

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