The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.
Throughout the past couple years of chatting with various couples about money, I have noticed a shift from the words, “our money” to “his money” and “her money”. It seems that fewer and fewer people are combining their bank accounts and have instead decided to keep them separate.
When you stop and think about, it kind of makes sense I guess. People are waiting longer to get married and have therefore become self-reliant for many years. And, many more people are living together before marriage (with separate accounts still) and just continue to live the same way even after they do eventually get hitched. One of them covers the mortgage, the other pays for groceries, and when they go out to eat it might be a toss-up for who covers the bill. This method seems to work well for some, but I’m still a promoter of shared finances.
Why I Believe in a Joint Bank Account
When I was growing up, I remember my parents sitting down at the table once a month to do two things. One was to type up sales receipts for the cars my Dad had sold (he owned a car dealership as his side-business), and the other was to pay the bills and balance the checkbook. They held the belief that since they were married, they therefore agreed to share their possessions, which simply meant to place both of their incomes into the same account. After viewing this first-hand as a child, I have seen four positive outcomes stem from their joint account.
1) It Encourages a Common Goal
When people have separate accounts, it is less likely that the two individuals share a common goal. If I would split them up and take them into separate rooms to ask the question, “What are your goals 10 years from now? How about 30 years from now?” it is very unlikely that they would provide the same answer.
A shared account encourages a common goal between the two individuals. If they commonly spend all of their money each month and contribute nothing to savings, they will probably ask each other the question, “What are we doing? And why are we not saving for something in the future?” In other words, “What are our goals?” As they both view the account, it is more likely that they would come together and spend (or rather, not spend) with a purpose for the future.
2) It Yields Built-In Accountability
If I were married (it’s happening soon by the way) and my spouse and I decided to try and save $300 each month, but instead, I had a bad habit of spending this money on random magazines, candy, and coffee, then this would be a serious problem. The joint account would probably make me think twice about spending the money on pointless things, and would instead provide me with a new accountability partner, my spouse. This might be a nuisance in the present, but it will create a much brighter future.
3) His/Her Money Becomes “Our” Money
Adults are sounding more and more selfish these days. Wives want more appealing décor in their house and men want new fishing rods, but each of them say, “I’m not wasting my money on that purchase. Why don’t you use your money?” When you spoke your vows at the wedding, didn’t you both agree that what’s yours is hers and hers is yours? Then what’s this “my money” and “your money” business? Simply put, it’s just a whole bunch of childishness.
If, however, you both have a mindset of that pot of money being both of yours, then you’ll have to come together and decide what’s stupid for your future and what’s smart. If you both can’t come together on a decision, then you don’t purchase the item. Simple as that. Let me tell you, stupid purchases occur much less frequently this way.
4) No Hidden Purchases
When you’re married to someone, there should be no secrets. No hidden relationships, no hidden actions, and no hidden purchases. If you’re trying to hide something, then you probably shouldn’t be doing it in the first place. Joint accounts leave everything out in the open, which will encourage each of you to stay on the straight and narrow and if that happens, it should bring you both closer together.
Many couples say that they fight much less frequently since they separated their finances, and I believe them. The only problem is that instead of being one in their marriage, they have now made themselves into two individuals that live under the same roof. Sure, there are less fights, but I believe that separate accounts are actually distancing both of you from one another. If you want to truly care for each other and build up your common goals, then I think a joint account is the ticket to get there.
What do you think? Are you an advocate of a joint bank account?
Share your experiences by commenting below!
***Photo courtesy of https://www.flickr.com/photos/exalthim/3800467037/in/
