Joint vs. Separate Bank Accounts: How to Test the Waters


Photo courtesy of Mike Baird

Let me start by saying this: I don’t care whether you and your partner join all of your money or keep everything separate. I really don’t. Whose name is on what bank account doesn’t matter to me.

As I said the other day, there’s only one thing that actually matters: working towards joint goals.

The question of joint vs. separate bank accounts is just one of logistics. It’s no more than that.

Still, it’s a question you have to answer as you start a family. However you end up doing it, you’re going to have to make a lot of financial decisions together and you have to have a system for doing it.

And if you’ve never run your financial life with someone else (and most of us haven’t before marriage), this can be a pretty daunting thing to try and figure out.

There’s no one right answer, so I can’t tell you how to do it. The right approach for you and your partner is whichever one helps you best work towards your goals.

But what I’d like to do is give you some options.

So here are three different ways that you can test out the joint vs. separate waters. My hope is that this relieves some of the pressure around the decision by giving you a few ways to try out managing your money together without completely giving up your independence.

Separate accounts. Split bills.

This is the method that Casey and I used when we were living together before we got married and joined accounts. It worked great for us and probably would have continued to work just fine if we had wanted to stick with it.

Basically, we each had our separate accounts which were used BOTH for personal and joint expenses. Receipts for joint expenses went into a box and at the end of the month we would tally them up. We entered the receipts into an excel and if one person had paid more than their “share” during the month, which was almost always the case, the other person wrote them a check for the difference.

This is a great approach because it helps you get used to the mentality of having joint goals without having to commit to joint accounts.

Joint account for joint expenses

A slightly different take would be to have just a single joint account that’s used to pay your joint expenses. At the start of each month, each person transfers their share of the month’s expenses to the joint account, and those expenses are paid from there.

This approach requires a little more planning and a little more coordination than the first one.

The planning comes in knowing how much you actually spend each month so that you can put the right amount of money into the joint account. This will probably be hard to know at first, but after a few months of either budgeting or tracking your spending you should have a good sense of it.

The coordination comes in actually spending that money together. No longer are you simply spending your own money as you see fit and splitting the check. With a joint account, you’re now jointly responsible for how that money gets managed, and to be honest there’s a learning curve there.

The nice thing about this approach is that you can start slow and work your way up, which is exactly how I would do it. Start with a stable expense like your rent or mortgage that isn’t difficult to plan or coordinate. It’s a set amount every month, so you can handle it pretty easily.

Once you get comfortable, you can work your way up to slightly less stable bills like utilities, which may vary from month to month but don’t require a lot of ongoing coordination.

The final frontier would be adding something like groceries, which really requires you to coordinate well in terms of what you’re going to eat, who buys what, etc. But of course, there’s no need to ever get this far if you’re able to work well towards your joint goals without it.

Join everything, but keep individual accounts for “free spend” money

If you’ve gotten your feet wet with at least one of the approaches above and you feel comfortable managing your money together, deciding to join everything can actually simplify things for you. The process to move everything to joint accounts can be a bit of a pain, but once it’s done you can forget about all the bill splitting. The logistics actually become simpler

But it can be difficult to learn how to share everything. Which is why it can be a great idea to keep separate accounts for what I like to call “free spend” money.

Which is why it can be a great idea to keep separate accounts for what I like to call “free spend” money.

“Free spend” money is just a way for you to keep a little bit of your independence even while most of your finances are joint. It’s a set amount of money, included in your budget, that each person gets to spend however they want. It lets you flex a little bit of those “me” muscles every now and again without putting your family’s long-term goals at risk.

The simplest way to do this is for each partner to keep an individual checking account and to schedule an automatic monthly transaction from your joint account to each separate checking account for whatever “free spend” amount you’ve budgeted. Then, spend the money guilt and judgment free!

Marriage is great. Doing things together is great. But don’t forget that you’re still both individuals as well. It’s okay to give yourselves some room to just be yourselves.

Choose your own adventure

No matter how you do it, figuring out how to manage your money with someone else can be a challenge. And there’s no one right way to go about it. As long as you keep the focus on your joint goals, the system you come up with can work however you want.

More than anything, I hope the advice here helps relieve a little bit of the pressure around your decisions. You don’t have to dive right into the “join everything” camp. There are ways to try out managing things together without joining everything, and you might find that you never need to go further than that.

You have options. And this is your life, so you can choose whatever path works for you.

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12 Comments... Read them below or add one of your own
  • Michael Solari April 3, 2014

    My wife and I have various joint savings accounts for different goals. We have separate checking accounts and I’m not worried about combining them. It all comes down to trust. We trust each other not to blow our money on things we didn’t discuss

    • Matt @ momanddadmoney April 4, 2014

      Love that you bring up the idea of trust. No matter how you go about it, that’s really an essential part of the process. If you can’t trust each other the logistics are irrelevant. It won’t work.

  • E.M. April 3, 2014

    I like these steps. My boyfriend and I have been doing the first step – having separate accounts and just splitting the rent and groceries. Since we are moving and our banks won’t be available down there, we have been talking about opening a joint account for rent, utilities and groceries. We’ll still keep our savings separate until we pay off our student loans.

    • Matt @ momanddadmoney April 4, 2014

      That’s how my wife and I started out too. I think it’s a great way to get your feet wet without diving in head first.

  • PFUtopia April 3, 2014

    Or, there’s how my wife and I approach things. We have separate accounts. I pay nearly all of the household bills out of my account. She has a few items she pays out of her account (her credit card and a small loan payment). After she makes her payments, she transfers everything left over to me. So, there is a bit of autonomy because I don’t audit every single expense she incurs. However, I do know how much she earns and what the normal “run rate” is for expenses so I can tell what’s within reason. In essence, we are functioning jointly but with completely separate accounts.

    • Matt @ momanddadmoney April 4, 2014

      Thanks for sharing! I’m sure there are an almost infinite number of ways to do it, so it’s really all about figuring out what works for you.

  • bands thuthez April 3, 2014

    Having shared goals as the underpinning for paying expenses is a wise strategy regardless of the money mechanics involved. The presumption here is that there is some sort of equal contribution to “common” expenses. The differentiator between parties (married or not) seems to be the “free spend” component. Commenters such as PFUtopia speak to aspects of the other element, which are the inevitable differences between two people–in terms of income, individual debts, spending habits, communal responsibilities/tasks (e.g. cooking, cleaning, babysitting) and a whole host of other relevant variables. The so called “independence” aspect of separate accounts–but with apparently equal contributions–can be a fragile proposition when other variables come into play. Which person uses vacation from work with to mind the baby? What if one person makes less than the other (a structural economic problem for women in particular)? How do those student loans factor into the equation? What if someone has a medical condition that involves economic restraints or costs? What if one partner disputes the “run rate” of the other? All of these variables can wreak havoc with the separate accounts strategy. It would be interesting to hear how these issues factor into the larger equation as well as the personal interactions between two people.

    • Matt @ momanddadmoney April 4, 2014

      I think you bring up a lot of great examples that will definitely factor into the more nuanced conversation that each couple has to have themselves. The reality is that the approaches described here are high-level, but there are certainly details to iron out that can really only be done at an individual level.

      What I really think all of your questions come back to is the idea of focusing on joint goals, as well as keeping an open line of communication as situations and needs change. Some of the variables you bring up might cause problems in one relationship and not another, or might argue for a particular strategy for one couple and a different one for another. It really does get very personal and the logistics do play a role in the conversation. But I don’t think there’s one right way to do it. The best you can do is know what your options are and figure out the details as you go.

  • Laurie @thefrugalfarmer April 4, 2014

    Another great post, Matt. Rick and I do joint accounts with “free spend” money and it works out great. My mom and stepdad do the separate accounts, but have that joint account to pay bills with, and this has been perfect for them. They have a set list of what gets paid out of the joint account (groceries, necessary housing expenses/repairs, etc.,) and everything else they pay and manage on their own.

    • Matt @ momanddadmoney April 4, 2014

      Perfect example of two couples who can do things very differently and each have their own success. Thanks for sharing Laurie!

  • Cat Alford/ Budget Blonde April 6, 2014

    Ha I like the “choose your own adventure” We’re mostly joint and each have a high yield savings account for gifts for the other one, etc. 🙂

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