Loan Advice

Why Couples Need Separate Bank Accounts in Marriage

by Jim Hughes   October 14, 2019

Figuring out how to manage your finances when married can be a lot trickier than writing your vows. There are many opinions on how to balance a checkbook between partners. For our money, having separate bank accounts is the most logical solution for managing you and your spouse’s finances. Here’s why.

Choosing whether to share a bank account.

The modern marriage is different than it was only a generation ago. Nowadays, many couples question whether or not they should keep their accounts separate or merge them once they marry.

While there are arguments for both types of financial practices in marriage, for many couples keeping their accounts separate is a necessity.

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Reasons Spouses Choose to Keep Their Money Separate

There are many reasons why couples choose to keep separate accounts.

  • Nowadays, people spend more time being single before they settle down; the first-time bride now gets married at the age of 27, which is seven years later than brides got married back in 1960.
  • Later-marrieds can have a significant amount of money in their savings accounts before they get married. This money doesn’t count as marital property in the eyes of the law, so financially, it makes sense to keep this money in a separate account.
  • It may also be that one spouse comes into the marriage with a significant amount of debt, which may come from a divorce as well as from credit cards, cash advance they have to pay back, student loans, and the like.
  • One spouse may have to pay alimony or child support. If the accounts of the spouse who has to pay child support or alimony ever get garnished, then the spouse’s money, if it’s in a joint account, will get taken, too.
  • It could be that one spouse really doesn’t have any financial literacy at all. This spouse may not have a bank account. They could turn to a no bank account payday loan to make ends meet or resort to putting money in a jar in order to save it.

Again, these examples are extreme, but they do point to some of the issues involved when two people with very different money habits decide to marry.

For people in this predicament, being in the “married but separate bank accounts” category makes perfect sense. If they can eventually learn how to approach their finances on a more level playing field, then they can talk about merging their accounts.

The Self-Employed Spouse

Another time when separate bank accounts for spouses makes sense is when one is self-employed. Depending on that spouse’s business model, it may be necessary to turn to alternative means of financing, like a line of credit or payday loans online for self-employed business owners, in order to make business expenses. In this case, the question of joint or separate bank accounts in marriage is easier to answer. It’s probably best, at least where the business is concerned, to keep accounts separate.

It is not uncommon for the self-employed to turn to payday loans online, and it can be better for the spouse to keep their account clear of short-term debts.

What Percentage of Married Couples Have Separate Bank Accounts?

First, it’s important to know that there is a significant percentage of married couples with separate bank accounts. Between 28 percent and 42 percent of married couples keep their bank accounts separate.

That means every time you go to the grocery store, nearly half the married people there are spending money from their own checking account. So, it’s not as abnormal as some people think. Realizing that the practice is commonplace helps many couples warm up to the idea of managing their own revenue.

Still, it can be a bumpy ride at first.

How to Navigate Having Separate Bank Accounts

There can be less stress in a marriage with separate bank accounts.

Some couples worry about the implications of having separate bank accounts. For some, there is a subconscious belief that if they separate their bank accounts early on in the marriage, they are doing it so that it will be easier for them to separate their money when they get divorced. However, this is never the reason why couples choose to have separate accounts.

Couples keep their bank accounts separate to save their marriage, not doom it. Couples with separate bank accounts may fight over money problems less often than couples who share a bank account, especially if one spouse tends to be frugal and the other one is a spendthrift.

Who Should Pay the Bills in a Marriage?

Having a separate account can cause more headaches than it solves if the couple does not have a plan in place for who should pay for what.

Here’s how one couple worked out their different spending habits. To begin with, they sat down and talked honestly about their strengths and weaknesses when it comes to finances.

As it turns out, the husband had very stable finances. He liked everything to be paid on time. The thought of not being able to make his basic expenses stressed him out.

The wife, on the other hand, tended to be freer with her money. She didn’t share her husband’s thrifty habits.

They decided that they would keep their accounts separate. They further decided that he should pay the bills that remained the same each month. He paid the utilities, the loan on the car, and the rent. She paid for purchases like clothing and groceries, the couple’s entertainment, and unexpected emergencies such as car repairs.

Finally, they kept things honest between them by giving the other access to their accounts. For example, if the wife needed money to pay the utility bills, then she would take it from her husband’s account.

He, in turn, could tap into her account to pay for a new pair of work shoes or lunch out with a coworker. They jointly decided on how to use unexpected financial windfalls.

When couples have this amount of transparency, there is no hiding paying back those easy payday loans that one spouse took out to make their business’s budget for the month or the five pairs of pants bought at the fire sale.

Advantages of Keeping Accounts Separate

For this couple and others like them, separate bank accounts in marriage make sense and help to keep the peace. To a degree, their financial plan reflects the sound financial habits of couples who share joint bank accounts, according to US News and World Report.

Couples who plan their finances in this way get to maintain some of their autonomy. It should be additionally noted that couples who share finances ultimately report being happier than those who don’t.

Budgeting for couples sometimes means looking at the complete financial picture.

Again, here are some of the advantages of keeping separate accounts:

  • Each spouse maintains their independence
  • They protect the assets from before the marriage and protect the other spouse from personal debt
  • If the couple does separate, it’s easier to split the finances
  • It allows two people with very different spending habits to co-exist
  • It gives couples enough time to develop the trust required to share accounts

Keeping separate bank accounts in marriage has become more common for many couples. Many choose to keep separate bank accounts in marriage in order to avoid unnecessary conflicts in their relationship.

Jim Hughes   OpenCashAdvance Marketing Manager
Personal Finance
Jim Hughes remembers checking his first email on the original BlackBerry 850 nearly 20 years ago. It was spam, and he fell for it. Even so, he’s been on the beat every day since, following the ebbs and flows of financial technology. Look to Jim for insider exclusives on shorter-duration loans, installment loans, and other popular products in fintech today.