Joint bank accounts for couples used to be the norm. But now, more are choosing to keep separate accounts, even after making lifelong commitments like buying a house and having children.
According to a recent survey by ME Bank, 71% of people in a relationship share a joint account. And the proportion keeps falling with age — 76% of over-55s have a joint account compared with 68% of 25 to 39-year-olds.
So, what should you do: combine your funds or keep your money separate? Here, we break down the reasons for and against, and a third option that might suit you best.
For joining your bank accounts
For couples in long-term, committed relationships, joint accounts can promote joint accountability, says financial planner Rhiannon Robinson, owner of Finance Women.
“Having a joint account encourages a couple to discuss where they are with their finances and encourages positive spending patterns,” she says. “Couples tend to come to an agreement about what spending patterns are and aren’t acceptable, so there’s a sense of being in it together.”
Natasha Janssens, an accountant, financial planner and founder of Women with Cents, says joint accounts can help couples build trust and work towards shared financial goals. Plus, from a practical perspective, she says they “make it easier to manage the bills and day-to-day spending”.
For keeping your accounts separate
For many, keeping cash separate is a sign of financial independence, and it’s an increasingly popular approach for couples who don’t spend money in a similar way — in particular, when one half of a couple is a saver and the other a spender — or who seek the freedom to keep purchases private.
“Separate accounts can give you a greater sense of independence and control over your money,” Janssens explains. A survey by Relationships Australia found that disagreements about money are a major source of stress — and divorce — and Robinson says keeping separate accounts can help alleviate the strain.
“Many couples have a need for privacy when it comes to finances,” she says. “They might fight a lot about individual spending choices or feel they’re being made to feel ashamed about their spending. In these instances, shared bank accounts don’t work well.”
A third option
If neither option is a good fit for your relationship, then a combination of joint and separate accounts could suit. “What can work really well is to have your household finances joined and each have a separate bank account for discretionary spending,” says Robinson.
“You as a couple decide the basic categories — mortgage or rent, utilities and groceries are shared, and personal spending like haircuts, clothes and books comes out of your individual bank accounts.” Janssens says that aligning this approach with the length and stability of your relationship can be an effective strategy to prevent arguments and keep information about your finances transparent.
“If the relationship is fairly new, have your salary go into your individual accounts so that you are still maintaining your financial independence, and then transfer a certain amount into a joint account from which you can pay joint bills,” she adds.
“As the relationship becomes more serious, you can then adjust what you do so that your salaries go into the joint account, and you can then transfer some pocket money for yourselves into your own accounts.”
Ultimately, Robinson says the ability to communicate with your partner about your finances — especially if your discussions about money aren’t always constructive — is more important than whether you have a joint or separate account, or a combination of the two. “It’s vital to be able to communicate your financial values and what you’re trying to achieve, and work through any problems as well as how you’ll organise the day-to-day,” she says.
This story originally appeared in Fernwood magazine.