On the surface it seems like a small thing. "What's mine is yours" is the romantic position, but you've worked hard to get where you are and shouldn't you protect that? More powerful than the ring you are wearing, ceding all financial independence into a joint account can be scary. While experts say that keeping all of your money separate can damage your relationship, you know that adopting your partner's debt or different spending habits can also add undue stress. Therein lies the dilemma: to protect yourself or to jump in with both feet.
Joint Account or Multiple Accounts
You already know that you have three choices: keep your money separate, combine all of it or keep some of it separate while using a joint account for household bills. Separate accounts work fine for couples with excellent jobs, but if one of you gets sick or takes time off to stay home with a baby you might need to rethink the approach. Joint accounts also work if you have lots of disposable income, but when things get tight you might start fighting over money spent on a pair of jeans or a drink with friends. Some couples compromise on a joint account for household expenses and separate individual accounts for discretionary spending. If you choose to go this route, make sure to keep the lines of communication open so that if there are disparate amounts in the accounts the person with less money doesn't begin to resent the person with more. Imagine scrimping and saving all month for a night out with friends while your partner has enough to easily buy a new car.
Conversations about money may be far less fun than those centered around planning your wedding and feathering your nest, but they are vital to the health of your marriage. You need to decide who will pay the bills and how you will combine your money. If you never miss a payment, but your partner likes to wait until the last minute or tends to forget a bill here and there, the decision to take over that job is easy, but you still need to decide which account is used to pay them. You both use the electricity, and petty disputes about who uses more won't do either of you any good. Make sure you are clear with each other about how many bills each of you has and how much is needed to pay them, then decide which account you will use. This process is much easier if all of your money goes into one account, but as long as you are open with each other you can make sure that the bill-paying account is sufficiently funded each month if you decide to maintain individual accounts.
Debts and Joint Accounts
If one of you is deeply in debt, think carefully about establishing a joint account, especially if you live in a community property state. In community property states, money deposited into a joint account can be taken to pay debts incurred by only one half of a couple even if the debts predated the wedding. Your partner's income is protected if you retain separate accounts until your pre-marriage debts are paid off. Debts incurred after the wedding are both of yours in community property states no matter which kind of accounts you maintain. Common law states, on the other hand, consider each partner's income and debt separately, so even if you maintain a joint account only one half of it can be taken to satisfy one partner's debts in most states.
As difficult as it is to think about, death, incapacitating illness and divorce do happen. Joint accounts make life much easier for the surviving or healthy spouse in the case of death or illness. Generally your spouse will have immediate access to any money in the joint account while he or she might need to wait to access individual accounts. Consult your bank for details on how to list your names or if you need a death provision on the account to ensure immediate access. In the case of illness, if you only maintain separate accounts your partner may be cutoff from needed funds while a conservatorship is established to grant him or her access. Separate accounts, on the other hand may protect your assets in the event of a divorce unless you live in a community property state.
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