Yesterday, my friend Susan talked about whether we should have a joint bank account with our spouse. I thought it was an interesting topic, and she inspires me to write this post and share my opinion.
First of all, marriage involves blending of two different personalities for better or for worse. However, there is no guarantee of a “happily ever after” in all marriages, even though there is a joint account. It requires a lot of hard works to make it work.
One common question that most of us will ask ourselves at the beginning of our marriage: Is it a good idea to open a joint bank account with our spouse?
Seeing that most households today have two incomes, many married couples opt for the separate bank account route, and I’m no exception. I’ve been a very independent person since young. I admit that I first cringed at the thought of sharing money with V, even though he is richer than me.
He is frugal and makes every attempt to stretch his dollar as far as it can go. But on the other hand, I’m the one who enjoys shopping and easy with money. You may think that I should just tap onto his bank account, so I’ll have more money to spend. But I tell you, he will ‘nag until my ears drop’. I like to spend my own money, but not my husband’s money.
It’s about financial freedom…
The way I see it, we enjoy our financial freedom. Till today, we don’t drill into how much we have in our own savings account and how much we spend every month. We respect each other’s privacy. We never have any financial disputes, and we never argue about money. That’s the beauty of it.
I like to highlight that it’s not always the lack of money in a relationship that causes arguments, but the individual’s view of how to save or spend money. A couple who is comfortably well-off can have just as many arguments about money as couples living from pay cheque to pay cheque every month.
So, in my point of view, a joint account is not necessarily a good idea if two people have a vastly different view of money, or when one earn significantly less or more than the other. When there is a huge disparity in income, it may also induce unnecessary tension and anxiety. It is perfectly okay if the man earns more, but what if it’s the other way round?
But, the good thing about having a joint account and sharing all household expenses is that it will definitely strengthened family commitment. Indirectly, it forces a couple to be completely honest with each other. Every spending can have an impact on the other, so there is no secret they can keep from each other.
It’s difficult to explain why we need to spend $300 on a hairdo, while he only spends $10 for a haircut. Or why he needs to spend $1000 for sports rim when the current ones are working just fine. So, to avoid answering these tough questions, I think we are better off without a joint account.
But if there is no joint account, how do you manage the joint expenses? You may ask. Personally, I don’t believe in a relationship where the man pays all the bills, unless the woman is not working. V and I don’t set-up a joint account that is used for joint expenses such as groceries, management fees, school fees, utility bills, etc.
We manage it in a simple way. I pay for expenses related to our son, such as school fees and enrichment classes. He pays for all the rest. When we go for holidays or buy big ticket items like furniture or electrical appliances, we usually split the bills.
With that being said, we do not have a joint account for joint expenses, but we do have one joint account for savings. This one and only joint account of ours was set-up the year our son was born. It reflects our commitment to save money for his future education.
Every month, we transfer a certain amount of money into this special account. One of our financial goals is to save enough money for his tertiary education before he reaches school-leaving age. Saving for our children’s education is similar to any other long-term savings goal. We make a budget and decide how much you can save each month, and make adjustment each year to account for inflation.
When it comes to major purchase like our new home, we do the budget works together and agree upfront on how much we want to fork out from our own savings and CPF for the deposits, as well as subsequent mortgage payments.
Money and trust matter the most!
A joint account, in my opinion, is not a necessity in marriage. To me, two things that matter most are money and trust. We trust each other, so we don’t peep into each other’s account. V is the “conventional” guy who still updates his bank passbook, but I never have the desire to peep into his numbers.
On the other hand, I’m the “all-internet” kind of person. I never keep a passbook, so he is clueless of how much I have, but he never ask either. We have our own savings for retirement and we trust each other on how we manage our own finance. So, I’m glad that our separate bank account route has worked well thus far.
Now, what do you think about joint bank account? Yay or Nay? I like to hear from you too!
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That’s an interesting post. I’m at the other end of the spectrum from you so it’s enlightening to read about your views. For us, we fully merge our money all into one from day one. We also have never argued about money, nor ever involved ourselves in who should pay this, who more or less etc right from the start. We do it this way because We believe when a couple is married, they become one. There’s no you, there’s no me, no yours, no mine but it’s ours. So everything we do, we do it together and there are no secrets. But I agree, it’s easier this way if both partners have the same view on managing money. We both don’t splurge, neither are we particularly frugal. If either of us want to buy branded goods, which is once in a while, we would happily encourage the other to do so, yes even if its a sport rim or new body kit! Just as long as no one’s drying up the account we are happy. It would however, be hard if both partners are each at the extreme end. I would, for instance, never agree to joint account if my partner is unwise with money. So I agree both partners need to be on the same page if they want a joint account. I think joint account is about trusting in each other completely not only financially but also trusting fully that the marriage is forever joint. Without trust, there will surely be constant bickering & questioning over money issues. But I guess that applies with or without joint account.
Hi Homeschoolsg,
Thanks for sharing your opinion on the other side of the spectrum. It’s interesting to read how couples like yourself manage their joint accounts. Yes, ultimately it’s about trust whether the joint account exists or not. I’m happy to read that you and your husband are on the same page when it comes to save, spending and finance management.
Hi Emily, interesting read!
I think having a joint account suggests that the separate accounts are private and personal. I have many friends who don’t divulge how much they have in their separate accounts to their spouses (and they don’t know their spouses’ account balance either). I think it is a selfish way of looking at a marriage. Imagine one party scrimping and saving away thinking that they are short of money when in fact the other half has a fat account. A couple should enjoy and go through hardship together!
For us, we have separate accounts and no joint accounts. However, we know how much exactly each other has and there are no secret accounts. WYSIWYG! We have complete trust over money and PIN/passwords are shared. I pay all the bills and if running low on money, I will get her ATM card for the rest.
I think this creates a sense of ‘we’ rather than ‘you’ and ‘me’. Saves us money too because when we are lemming after something nice (but do not need), we would openly consult each other because we feel that we are spending ‘our’ money afterall. So far so good!
Hi Daddy Darren,
Thanks for sharing your view on this topic, and I’m glad to hear that your arrangement works well. I totally agree with you that a couple should enjoy and also go through hardship together. It’s unfair if one party is saving and the other party is spending it away.
Btw, you have a really nice blog too!
i think this is something all husband & wife have to have a mutual agreement on the shared finances for the household especially when children are involved.
For myself, we have a joint account that we both contributed at certain percentage into it monthly with additional 10% for bonuses. The money is used for household expenses(groceries, utility, taxes, monthly conservancy), maid, kids childcare, tuition, enrichment classes, yearly insurances.
Then we have our own savings account that we maintain ourself, we dont ask about who has how much, but we roughly know how much each person is saving(lol). im a spender, my hubby is a saver, this way works better, else we will argue abt it eventually. Im spending my own money so he cant intervene much as i still contribute to our household expenses without fail. i love this independency !
traveling wise, we shared. at times. each of us will sponsor for the trips. This works fine till now after 7 years of marriage. *touch wood*
Dear Mico,
That’s a very good arrangement. Personally, I like to have my own account and spend on things that I like too. And since it’s my money, he doesn’t intervene much also.
And here’s wishing you and your family and Happy & Prosperous Chinese New Year!