I have 13 years of experience working at financial institutions and I’ve seen an absurd number of people have problems with their finances due to marriage that could have been easily avoided. Yes, I mean that marriage harms their finances, and then the financial strain will likely hurt the marriage over time. The most frustrating part is that these problems can be very difficult to fix if they’re not caught quickly enough. I’m hoping my guide will protect people and their finances.
Shared versus Separate Accounts
A large number of people believe married couples should either have a single shared account or two separate accounts. Some people can get heated on this and ,as a banking professional, I can tell you that you should have at least three accounts. One shared, and two separate.
The shared account is mostly for bills and checks that are written to both parties. This is extremely common post wedding, and due to fraud, most banks will want to avoid dealing with a check written with a name that’s not on the account.
There are also situations where one partner can’t cash a check so they have to send the other. Without a shared account there are no options for cashing. You could deposit and wait for the check to clear, but— from my experience— many people hate this. If you have bills due tomorrow then you’re screwed.
A shared account is also a good idea to help with bills. If you both put money into an account for bills, that means either of you can pay the bills. If one of you are unable to pay a bill, the other easily can from the account.
On a side note, keep in mind if any party is changing or keeping their old name post marriage. People frequently write checks to old names or names that are incorrect if you’re keeping your old name. Make sure these checks are rewritten since they’re pretty much useless to a bank. How can they trust a check written to a non-existent name?
There are a ton of reasons to have separate accounts, but I’m going to start with the simplest. If you want to buy a gift for your partner for a holiday and want it to be a surprise, that’s practically impossible if you don’t have a separate account. They’re going to see what store and the cost of the item, and most of the time you can guess what the gift is from that information.
Another thing that most people don’t plan for is spending anxiety. Let’s say one partner is obsessed with saving for emergencies, and the other partner likes to spend money to treat themselves when they’re stressed. I’ve seen many couples come into conflict due to these kinds of anxieties. If you have separate accounts then you are free to save or spend as you see fit.
Lastly, I want to go into the worst reason for separate accounts. Nobody plans to get into a fight with their partner or a toxic relationship, but it’s something that sadly many people just kind of find themselves in. Sometimes you miss the red flags, or ignore them, or maybe the signs weren’t visible until you were fairly deep in the relationship. Many people will use finances to control their partner. Having a separate account is the best way to protect yourself from these situations. Now most people will go “this will never happen to me,” and that is hopefully the case. But given that I listed two other important reasons for separate accounts, at least do it for those reasons. I just want to make sure as many people as I can reach can be safe from this, I’ve seen so many marriages devolve into stealing or hoarding money to manipulate each other or to fuel addictions. If you find yourself in one of these situations, remember that most banks allow you to hide an account online. That way you won’t see it on your phone or computer, but you can do transactions in person at the branch.
On a Lighter Note
To lighten the mood a bit, let’s talk about vacations! I mentioned having at least three primary accounts, but I’ve found it helps many couples to have other accounts as well. Please if you do this check your bank on their account fees because if you split your funds too much it can sometimes lead to fees.
It’s very helpful to have separate accounts between fun and bills. Having an account for vacations, video games, date nights, or whatever can really help with your planning. You should also have a separate emergency fund account for situations like car repairs, appliances breaking, etc.
I hope this advice helps you enjoy your lives together!