A key decision in a marriage is whether to combine your money into joint bank accounts. This decision can impact both your financial and marital success.
Joint Bank Accounts Were The Standard For Baby Boomers
Time for a dad’s story. In 1987, when my wife and I got married, we combined all our bank accounts into joint accounts. This was how it was done in our day. You got married and combined all your finances into joint bank accounts, end of story.
Life is More Complicated Today
Today’s finances are more complex when starting a marriage. Couples are coming into marriages with 401k accounts, student debt, homes with mortgages, children, and child support payments. So, the days of combining everything into joint accounts are not as common as it was when we first started out.
Today Less Than 40% of Couples Combine All Their Finances
A recent poll by Finder.com found that 34.8% of couples merge all their bank accounts. Another 34.8% use a blend of personal and joint accounts, and 28.1% still keep all their accounts separate.
The Case for Joint Bank Accounts
Deciding to pool all your money into joint bank accounts has many benefits. It provides a clear picture of your savings and spending activities. It allows instant access to all your accounts by mobile apps and the web. It simplifies budgeting and promotes trust and transparency in the relationship. One study shows that couples with joint bank accounts are the happiest.
The Case For Separate Bank Accounts
Some people balk at turning over their money to someone else. This could be from money issues in a previous relationship. Some individuals feel they are losing their sense of independence. They also may be coming into the relationship with a larger amount of assets than their spouse. There may be disagreements about paying for the other’s child support or student debt. It is important to understand the other’s need for not wanting to combine all their assets.
The Case For A Blended Approach
A modern-day approach is a blended approach, a combination of joint and individual bank accounts. This approach will help you to build trust in each other’s money habits. It also encourages an open line of communication about your finances. Tracking your budget vs. actuals is easier. Also, it still allows you to maintain separate accounts for assets you are not willing to combine.
Where To Start With A Joint Bank Account
Every couple should have a least one joint account for all their recurring expenses. This approach will make sure all your important bills get paid. It will also open up a line of communication about your finances by deciding who pays for what each month.
Conclusion
In a perfect world, every couple should pool all their assets and live happily ever after. But, in today’s world, this seems less realistic than in the past. So, you should agree to at least one joint bank account for your recurring expenses.
Readers, do you have combined, separate, or blended bank accounts? How did you decide on this approach? Do you have any examples or stories you can share? If so, please leave a comment below.
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