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Should You Use Joint or Separate Checking Accounts?
When couples get married, it is hard to get used to a merged life. They have to get used to sharing furniture, the bathroom, and the finances. If you and your spouse have different spending habits, this begs the question: should we keep separate or joint checking accounts?
There used to be no question of what to do. If you were a couple, you had a joint checking account with pretty checks that included both of your names. Those choices are quickly being replaced in favor of an account that reflects a sound financial position.
In other words, couples with mismatched spending habits are winding up in financial trouble and looking for a way out. That way out could be separate checking accounts. If this is the decision, couples must then determine which bills will be paid from which account. It is understood that each spouse will have his or her paycheck deposited in their own account.
The separate accounts can cause dissent in the ranks when one person is not as punctual with the bill paying and fees are charged. While it won't affect the account of the other spouse, it will affect their financial standing. Also, bills may not be able to be divided equally and one spouse may end up with less cash left over in their account.
Couples that are on an even keel when it comes to financial matters may opt for the joint checking account. All wages are deposited into one account and the bills for household expenses are paid from this one account. With one checkbook, the husband or the wife will be designated as the account manager and be in charge of making sure that the bills are paid each month.
Problems with this account come into play when the bank offers to issue a debit card in each person's name. Not only do you have a check writer, but now you also have two debit card holders that can potentially overdraw the account. In order for this system to work, both parties must agree to let the other one know when they are making a withdrawal. It may come to each person being given a monthly allowance in cash to keep the account free of financial problems.
A third solution is a merger of the two ideas: a joint account and two separate checking accounts. Separate accounts signify our independence even though we are now a couple. It allows each to manage their finances in a way that is acceptable to the account holder.
Each person will funnel money into the joint account for the sake of paying the household bills. If one spouse makes more, the amount that is given is a percentage of the total salary multiplied by the total household need for the month. This amount can be automatically transferred from the separate checking accounts each month. The only decision from there is who will manage the joint account and pay the bills.
Problems could arise with unexpected expenses. Unless money is also earmarked for the joint savings account, the couple may find themselves needing unforeseen car repairs, with no money to cover them in their joint account. Unexpected bills happen more often than we care to admit.
Joint or separate checking accounts depend on the preferences and spending habits of the individual spouses. If neither option hits the mark, the third option could be the best choice.
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