Should you get joint accounts, separate accounts, or a combination of both? It really depends on your communication style. To help you decide, here’s a rundown of the most common ways to manage money.
Pooled money. This is the most traditional financial arrangement among couples. Spouses combine their earnings and have equal access to a joint account.
Method works well when couples agree on how much money to spend and to save, and it saves having to pay fees on several accounts.
COD’ Pooling money requires couples to communicate and cooperate about finances since both are depositing and withdrawing money from the same account. The method also can pose problems when partners harbor resentments over spending differences.
Separate accounts, joint payments. You have separate accounts but split common expenses, such as rent, utilities, and vacations. Or, rather than splitting everything 50-50, you may agree that each of you will be wholly responsible for paying certain agreed-upon shared expenses. Each partner spends the money left over in their accounts as they wish.
You maintain a degree of financial independence, which can be especially important if you have been accustomed to living on your own for many years.
Cons: The plan doesn’t require either of you to talk about how you are spending your money or to develop a joint financial plan. Also, if one partner earns considerably less than the other, the lower wage earner will pay a higher portion of income on joint expenses unless adjustments are made.
Joint and separate accounts. Each spouse keeps money in both joint and separate accounts. You use the joint account for shared expenses such as rent, and the individual accounts for personal expenditures.
Pros: The system allows you to operate independently and interdependently.
Cons: Your bookkeeping becomes more difficult and time-consuming the more accounts you have.
Separate but not equal finances. Each of you keeps your finances separate, but you don’t pay for expenses equally. You might live off one salary and save the other, which only works if you have one salary large enough to support both of you.
Pros: Works well for couples who can live off one partner’s salary—usually the man’s—with the wife free to use her income for personal expenditures.
Cons: The woman in this plan ends up with little knowledge of her husband’s income and expenses, which could be important if his health falters or they divorce.
