When it comes to finances, there are three typical options newlyweds can choose:
- Joint Checking: Everything is shared, including credit cards. Both paychecks are deposited into one account and everything is paid and deducted from that one account.
- Separate Checking: Each individual keeps their own account, and they divvy up the bills or pay their portion of each bill.
- Separate Checking and One Joint Account: Individuals have their own accounts, but keep one joint account for all joint expenses, such as rent and utilities.
Eric and I chose to go with the Joint Checking. We never even discussed having separate accounts because that’s simply what our parents did and it seemed to work for them since they’re still together. In both cases, our moms handle the accounts, so it’s no surprise that I manage most of our finances as well. It’s also convenient for us, since neither one of us would be able to pay the rent on our own and it would be too much of a hassle to have to keep switching money across accounts any time something was due.
I do know of another newlywed couple that has separate accounts and anytime something is due, one of them pays it. This seems to work for them, but they also have a much larger spending limit than we do. They are definitely NOT newlyweds on a budget.
I guess when we first started sharing an account, it was a symbolism issue as well. About a week before we got married, we spent a whole day running errands to banks to ensure we were on each others’ accounts, got set up with joint credit cards (although we do still have some single name credit cards for credit history purposes), etc. Not only was it the way our parents had done things, but we really felt like we were going to be sharing everything in our lives and it made us feel more united. Since we didn’t live together before getting married, everything was new to us. And it was all so much fun. I think we both felt that if we somehow kept our finances separate, that it would feel like having one foot out the door. A “just in case,” if you will.
Because we’ve all heard the horror stories. The housewife that gets left by the husband for the secretary and has no job history, no credit history and pretty much gets screwed. Or the spouse who wakes up one day and finds out his credit history is ruined because his wife has a gambling problem.
Divorced couples may argue that separate finances ensure security, like a pre-nup. So are us married joint checking folks simply ignorant?
There are pros and cons to either scenario.
Pros: Symbolic unity, Convenience, More frequent financial check-ins and conversations
Cons: Couples may disagree on how money should be spent; The higher-income individual may become resentful of the lower-income individual; You are putting your entire financial trust into another human being who could at a whim leave you destitute; Need to have frequent conversations about balancing the budget if you’re both spending at the same time
Pros: Keep track of your own money as you see fit; No wondering if there is enough money in the bank since no one else but you touches it
Cons: Deciding joint expenditures; Deciding who pays what bill; Creating a system for joint financial and savings goals
Ultimately, there are a variety of different ways for couples to handle finances. Each couple should evaluate their spending habits, saving habits, and financial goals to determine how they should manage their finances and what is best for them.
Eric and I are all-in kinda people.
What do you think? Joint or separate?