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Making Separate Accounts Work as a Married Couple

Many couples feel that it is required: Once you are married, it is important to combine finances. However, this is not always the case. Sometimes, as a married couple, it is a better idea to keep your finances separate. Because every relationship is different, there is no reason that some couples find that it is better to keep accounts separate. Realize, though, that even in these situations it is important to work out a system that works well.

When to Consider Separate Accounts

There are some situations in which you might want to consider keeping separate accounts. Some of the reasons that married couples keep their finances mostly separate include:

  • One or both want to maintain control over personal money decisions: While some money decisions have to be made together no matter the situation, some married couples find it difficult to relinquish control in their personal spending. This is perfectly normal. With the marriage age increasing, many young professionals are already in jobs, and used to spending their money as they wish. Separate accounts can provide a way for young married persons to retain some of the financial freedom they are used to.
  • One spouse is irresponsible with money: You may love your spouse, but what if he or she is irresponsible with money? You don’t want your funds constantly raided. Separate accounts can be a way to protect yourself from the excesses of your partner. Unless you are in a common property state, it is often possible to clearly differentiate between your finances and your partner’s finances.
  • You want to keep your debts separate: When looking at credit accounts, or at a partner’s past debts due to financial indiscretion, you might decide that keeping things separate is the best way to go. This allows your partner to pay back his or her debts, without affecting your finances as much.
  • You are blending households: Many families are blended from previous marriages. In some cases, it makes sense to keep things separate so each partner can fulfill his or her financial obligations.

No matter the reasons for deciding to keep separate accounts, it is important to discuss the matter, and decide how to apportion financial responsibilities in the household. Both partners have to agree on a system, or the relationships may suffer.

Systems of Separate Accounts

When setting up a system of separate accounts, it is important to understand the financial needs and obligations of each partner. You should also take into consideration the other roles and responsibilities each partner has in the family. One spouse might have a part-time job, but be the primary caregiver for children, as well as taking care of most household chores. All of this should be taken into consideration when deciding how to set up a financial system within the household.

One way you can set up separate accounts is to assign shared expenses. For instance, one partner may take care of the mortgage payment, while the other takes of groceries, utilities and the car payment. This works if both partners have roughly the same income, and they can split shared household expenses down the middle. If a mortgage (or rent) payment is $900 a month, and one partner covers it, the other partner would cover all the other shared expenses up to that amount.

Another method is to simply split everything down the middle. You both contribute half the expenses to a shared checking account each month, and then each bill is paid from that account. This works for shared purchases, such as a television or a dining table, that you will both be using on a regular purpose. Non-shared expenses, such as a car only one of you uses, or a laptop that you buy for yourself, comes from individual accounts. Again, this works best when both partners make close to the same amount of money.

Difficulties start to arise when partners may not make the same amount of money. If your combined annual household income is $70,000, one partner might make $45,000 a year, while the other makes $25,000 a year. Many couples decide that the person making more money will pay for the major shared expenses out of his or her account, while the other spouse pays for smaller expenses. The idea is to make sure that each partner has the same amount of “spending” money each month.

Another possibility when dividing up shared expenses in a couple with differing incomes is to figure a percentage. In our example above, the person making $45,000 a year contributes 64% of the yearly income. The remaining 36% is contributed by the other partner. Each spouse would then contribute the appropriate percentage of expenses. With a $900 housing payment, the higher earner would pay $576 (64%) while the lower earner would pay $324 (36%).

Others simply figure out how much of their income should go toward paying shared expenses and meeting shared goals (retirement, housing, vacation, etc.). If you decide that each partner should put 60% of their income toward shared expenses, then each person has 40% of their income for spending. This might work well, unless one partner is “forced” to earn less because of his or her role as a primary caregiver or homemaker.

Problems that can Arise from Separate Accounts

Whether you combine everything, or keep things separate, there will always be issues to work through. Issues with separate accounts can include such problems as:

  • Resentment if one partner has a lot more discretionary income than another.
  • Resentment if one partner feels he or she is contributing more than the "fair share."
  • Concerns that one partner will not pay his or her portion of shared expenses. This is especially worrisome if you pay from individual accounts and you don’t trust your spouse to make timely payments.

No matter the financial system you choose, it is important to keep a dialogue about money going. Make sure that both partners are satisfied with the arrangement. Additionally, it is wise to revisit the arrangement regularly, just in case something needs to be tweaked, or if you feel that it is time for a new arrangement.


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