Finances are a major component of any long-term relationship. After all, they can be a factor in divorce if there’s a lack of financial transparency. Though there’s no ‘right way’ to manage money when you’re married, there’s an argument for having separate accounts. You’re probably wondering, ‘Should married couples have separate bank accounts?’ But before discussing the benefits of you and your spouse keeping money separately, let’s address some misconceptions.
3 Misconceptions About Having Separate Accounts
Despite the growing percentage of married couples with separate bank accounts, some couples are still hesitant about making the change. This could be due to various misconceptions, so let’s address them.
1. It Means You Don’t Trust Each Other
While having joint bank accounts can help foster trust, having separate accounts doesn’t imply the opposite. In fact, it can prevent secretive spending or hiding purchases from one another. Research shows that a significant chunk of people keep financial secrets from their partners, which can be a reason for divorce. Having separate accounts takes away the need to hide things and encourages communication about paying shared expenses.
2. It Makes The Divorce Process Easier
Many people have this misconception that keeping separate bank accounts makes the division of assets easier during the divorce process. However, keeping separate bank accounts won’t protect your money in the event of a divorce.
When you’re married, you can’t assume that your money is yours. Depending on which state you live in, the money in your separate account will be considered as community property. So, if you want to protect your money in the event of a divorce, the easiest way is to consult a family lawyer about a prenup.
3. It Sets You Up For Divorce
For some couples, pooling their finances in a joint account can feel like the glue that holds them together. But for others, it can feel like they’re trapped or bound to a marriage where their finances are at stake. If you consider yourself the type of person to stay in relationships based on feelings rather than finances, you should keep some money in a separate account.
5 Benefits of Keeping Separate Accounts
Now that you understand the misconceptions surrounding separate accounts let’s look at a couple of the benefits they provide to couples.
1. You Won’t Criticize Each Other’s Purchases
A significant advantage of having a separate account is that it gives you financial freedom to make certain purchases. It’s quite common for spouses to have different styles of spending; maybe you describe yourself as a thrifty shopper, with your partner being the opposite, or you just prefer to spend money on different things. Either way, keeping individual accounts means that you don’t have to ask for permission before you decide to buy yourself something.
2. Your Pre-Marital Savings Stay Yours
These days, the average age to get married in the US is increasing. As a result, more people are entering marriages with savings and assets they have accumulated over the years. Whether you inherited some money from a grandparent or saved up some money after college, it’s likely that you want it to stay yours.
Because you acquired that property when you weren’t married, it’s not marital property, so there’s no need to keep it in a joint account. If you do, there’s a chance that your spouse will try to claim half in the event of a divorce.
3. You Stay on Top of Finances
It happens all too often that one spouse is in charge of budgeting and managing finances, whether it’s for monthly groceries or yearly vacations. But doing this could put the dependent spouse at a disadvantage, particularly if the financially savvy spouse is incapacitated or passes away.
No one wants that for themselves or their spouse, which is why lawyers recommend keeping separate accounts. It encourages you to practice your budgeting and money management skills so you can stay on top of finances in the absence of your spouse.
4. You’re Prepared for the Worst
Whether you’ve just gotten married or have been in a loving marriage for years, the thought of divorce can be pretty unsavory. That being said, having a separate account can protect you in case of a divorce.
Things can become quite unpleasant, and spouses are known to have legally drained joint accounts, preventing the other person from accessing money. By keeping a separate account, you’ll have cash to pay for basic expenses without needing to go through complex legal procedures.
5. Protects You From Each Other’s Creditors
Just as people are entering marriage with pre-marital assets, they’re also entering with pre-marital debts and expenses. These can include student loans and child support payments from a previous marriage. Keeping a joint account can result in your spouse’s hard-earned money going towards these expenses.
Similarly, if you take out a loan for a personal expense on your joint account, it can affect both spouses’ credit scores negatively if you fail to pay it on time. Having a separate account allows you to keep pre-marital and individual debts and expenses aside.
FAQs
How to separate money in bank account?
There’s no one way to separate your accounts. The most common way couples do so is to have their own individual accounts and a joint account used to pay for any shared expenses like childcare and utility bills.
Should married couples have separate accounts?
Having separate accounts is an effective way to maintain financial autonomy, but that doesn’t mean you can’t have a joint account. By keeping an individual and shared account, you’re able to maintain financial independence and build trust with your spouse.
What to do if my wife or my husband wants separate bank accounts?
If your wife or husband opened separate bank accounts, it’s nothing to be worried about. Instead of worrying, communicate with them to determine how both of you will manage marital expenses.
