To have joint bank accounts or not to have joint bank accounts, that is the question. The answer lies somewhere in between. A married couple should probably have a joint, household bank account, but there is no good reason that each spouse shouldn't have an individual account, too. There are actually good reasons for married spouses to hang onto individual accounts, but the real challenge is how to blend individual and joint accounts.
Keeping Old Accounts
Couples bring many things to a marriage, including their existing bank accounts. Automatic bill paying, investments and other debits, plus direct deposit paychecks are already established with individual accounts. It is not necessary to close existing accounts and go through the trouble of changing things around. If your own bank accounts are all held at the same financial institution, you also have the option to link the accounts together. Linked accounts can be helpful to combine balances in order to avoid bank fees and to get better interest rates.
If you're the victim of identity theft, or if you lose or have your physical checkbook stolen, it's good to have another account as backup protection. In cases of fraud or identify theft when accounts linked to the compromised Social Security number are terminated, at least the other spouse would still have a clean individual account. Speaking of protection, don't make the mistake of thinking that keeping your money in separate accounts legally protects your money from your spouse's financial indiscretions. Marriage is a legal union, and in many states, having money in different accounts does not stop creditors from going after it.
Setting Up a Joint Account
There are compelling reasons for having separate bank accounts, but what's harder to decide is whether, or how, to set up joint accounts. It's difficult to make one sweeping recommendation that works for all couples. Many hipster young couples still have traditional views of marriage and what it should entail and have no problem merging finances. Some go into a marriage thinking they'll separate everything only to discover later that joint accounts make more sense. Carrie Schwab Pomerantz, daughter of brokerage giant Charles Schwab, reflects how early in her marriage she maintained separate bank accounts from her husband, but eventually they combined checking and even brokerage accounts.
Without any joint account you'll still have to come up with a plan on how you'll pay for joint expenses, like housing, utilities and groceries. One possibility is to have individual accounts and allocate a certain percentage of your paychecks into a joint account to pay for common expenses. Whether or not you're each completely free to do anything you like with the money in your separate accounts is still another matter that you will need to decide as a couple. Many experts like David Bach, author of “Smart Couples Finish Rich,” and financial wiz Suze Orman recommend that couples have a combination of joint and separate accounts. Separating finances completely, especially with first marriages, can be complicated and does not seem to work for the long term.
Annabella Gualdoni has written newsletters and reports for corporations and nonprofits since 1994. She is a real estate professional and also teaches subjects including international cooking and travel, dating/relationships and personal finance. Gualdoni has a Bachelor of Arts in international development from University of California, Berkeley, a Master of Arts in international relations from Boston University, and a Juris Doctor from Boston College Law School.