So me and my other had a conversation about bank accounts. Which system do you think would work best?

A) - One bank account that both incomes are deposited into, that pays for all monthly bills as well as personal spending (an agreed upon monthly allowance).

- or -

B) - 3 accounts. One which is a joint account used to pay for all finances, and a separate personal account for both parties in which X amount of dollars is deposited for personal spending money each month.


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I want your opinions because we have a disagreement on this issue, and I'd like to hear your opinions on this matter. Thank you!

Option B is the best way to go. This way the other person cannot just simply empty out the joint account of all the money recklessly or willfully.

Option B, that is what we do and it works very well. I really don't want to know what the curtains cost or how much she paid for that new dress.

Option B; I also recommend joint savings accounts for large ticket purchases and emergencies. If it gets more complicated, both parties need separate attorneys.

It all depends. If you don't work, like in my case, I like option A, and my fiancé does not mind at all. He says he works to make me happy. I also always tell him what I spend, or ask him if I can go shopping. He'll say yes or no, wait until Friday. I wouldn't spend recklessly because I'd be hurting both of us. Option B sound too complicated. You have to keep track of all the accounts. That is my opinion.

It all depends. If you don't work, like in my case, I like option A, and my fiance does not mind at all. He says he works to make me happy. I also always tell him what I spend, or ask him if I can go shopping. He'll say yes or no, wait until Friday. I wouldn't spend recklessly because I'd be hurting both of us. Option B sound too complicated. You have to keep track of all the accounts. That is my opinion.

The issue is that most women don't like the idea of "asking" permission from their husband to go shopping. Money is often the number one fight of couples.

By setting a budget, and putting a certain amount in one account to pay all of the budget bills, those are covered, the other money is a percentage agreed to that can be spent by either party, or saved up for special purchase that one party wants that the parties don't have to "ask" permission of.

Married more tham 30 years, and have a household account for bills, and the rest is split down the middle for our own needs, as individuals. I still keep my own Personal account I've had through 4 bank name changes. Her account is hers, (unless I run short and resort to begging) No arguments about money here, and when we need more for home, we put more into the joint account. If there is nothing left to split, we are not happy. But we both live within our allowance, most times anyway.

We do option B).

Hmm... I'm going to have to argue for the other option, everyone. Option A.

I'm of the opinion that one account is perfectly acceptable. When my fiancee' and I were planning everything there really wasn't any question about a joint account... I'm not sure if it was a trust thing or just a simply question of "ease."

I guess I don't see the necessity of three separate accounts. That seems a little excessive to me. But that's just me. :)

(Probably because its what my parents did)

Married - option A) with the "nerd" in the family overseeing the bill-paying and the "free-spirit" in charge of the "fun" schedule.

Unmarried - Option C, not B) with a written and signed/agreed splitting of expenses. Each maintains a separate account, that's TWO accounts, not three. Unmarrieds merging monies into a single account is a recipe for difficulty. Yes, people do it. Convenient, probably. Wise? No, not at all.

Like it or not, there are legal ramifications to banking and they do not match the legal ramifications of cohabitating. If people have a bad image of marraige/divorce rate, the cohabitate/breakup rate is MUCH higher.

It will be a source of peace in the cohabitator's household to not have a joint account that can become a source of contention. Keep it separate and follow the agreed written method of bill-paying.

HistorianChick,
I don't see it as 3 accounts. I'm assuming that both people work and already have their own bank accounts before they met. So really it's just a matter of what goes into the shared account - in our case it's the mortgage money. I made an Excel sheet for our budget with who pays what bills and that's how the rest of the expenses get paid. :)

That's a good point, NeedK, you're way more organized than I am with money... probably one of the reasons I am always SO thankful for pay day!

:)

It's my combination of B.B.A. and computer guy that comes into good use now and then. :)

LOL! See, my problem is lack of said computer guy AND a B.B.A!!

Shucks... now I'm feeling woefully inadequate.

I've got to get back to work - something I KNOW I'm good at!

(I'm sticking with the one account thing though... but I recognize the benefits of both, now :))

I would go with option B. It sucks to ask for stuff.

But then there's the question, what do you do when one person makes a considerable amount more than the other? Is equal money put into the joint account?

I would go with option B...But then there's the question, what do you do when one person makes a considerable amount more than the other? Is equal money put into the joint account?See, this underlines the problem. While cohabitating, these variances in income and graciousness and thoughtful/lessness have a much harder impact.

For marrieds... it's ALL "our" money regardless of where it comes from. Much easier to plan finances and allowances and budgets from that standpoint. But you simply CAN'T get away with that in cohabitating household.

Again, Option C - write out your mortgage agreement, make sure it includes dissolution considerations, and then each of you write your own checks and put them in the envelope together.

But then there's the question, what do you do when one person makes a considerable amount more than the other? Is equal money put into the joint account?
yeah we came to the conclusion that no matter which option (A or B), that we'd both get X amount of dollars to spend per month on personal things. The same X amount of dollars per individual.

So if I made a million dollars a month, and she made 100 (hehe), we'd both get 500 dollars a month automatically depostied into our separate accounts (option B), or we'd both get to withdraw or spend 500 dollars a month from the join account (option A).

Is this just a mental exercise or is there some unspoken issue here you're trying to wrap your head around?

Again, Option C - write out your mortgage agreement, make sure it includes dissolution considerations, and then each of you write your own checks and put them in the envelope together.
We aren't married yet, and both agree on separate accounts while we are single. But we both know that marriage is around the corner. So we are asking advice for bank accounts for married people. That's what this thread is for, bank accounts for married people.

is this just a mental exercise or is there some unspoken issue here you're trying to wrap your head around?
For now, we're fine. 2 separate accounts, we aren't married.

But marriage WILL happen. The ring is almost ready, I'm ready to propose this year, and we both know we'll be married. We've talked about everything and agree on almost every facet of the relationship, except this one issue.

I strongly urge singles who live together, to manage their own money, and agree to how the bills are split before the moving in happens. Its an accident waiting to happen. Made worse when one party, makes more than the other. As many here know the nasty thread about that subject. I think your wise EuRa, to be looking into these things now, before you get married.

That's what this thread is for, bank accounts for married people.
OK, then just remember that when you get married, it's not an "all or nothing" venture, it's an "all" venture. Each of you officially, emotionally, and now legally invested 100%, each. You don't meet halfway, you both go to the other end completely, you both own the whole field. Partners.

Fiscally, every married relationship I've interacted with (including my parents) that use his/hers/ours accounts, the his/hers stuff is actually a subtle method of separation. Sometimes it's more subtle than others, but I have to admit it hasn't been ultimately beneficial to the relationship.

Does it maybe avoid some arguments?. Probably. Convenient?. Arguable. But money is the basis of measuring the fiscal health of the corporation of "you guys". So it all needs to be joint, fully disclosed, with agreements about the budget, savings, retirement, pigeon-hole saving and even "mad money".

Since my wife and I lead a debt free life, we've put most of our financial life on automatic. All the monthly utilities pay themselves, our IRAs and savings accounts fund themselves every month, and we have a basic budget we use for how we spend money privately. We don't need to nitpick the small stuff (credit card debt will make nitpicking absolutely necessary, so avoid them).

We generally talk about any decision for unusual purchases, and either party can veto any purchase over $300. If one person says "no", it's a "no". Less than $300, if we really, REALLY want it, we get it. This is rare for us. And above $300 doesn't happen at all. We've agreed that unusual purchases must be agreed on by both or we move on.

When I want something and she says "no", I can respect that because I know she's not punishing me. I simply haven't made the case for the purchase to the point of her agreeing to sacrifice the money. Our relationship is solid so we can have these discussions without it becoming the end of the world.

Funny, the more people are in debt, the less likely they are to bother controlling their spending at all. 10 years ago we NEVER talked about any of this stuff and had $20k in credit debt. My wife told me that she felt so "broke" she would buy stuff just try and ease the stress of it all. How crazy is that? Now that we are debt-free, we have found how rich we are, how blessed our lives are and we find we "need" to make those random purchases less and less and less.

So, I know I'm going on and on, but I want to stress how much joy you can get out of the true life of fully-committed-fully-invested-fully-sacrificial partners.

So JB, this system works for you but it's also been 10+ years in the making. I'm not too sure we can jump into the system you got going. I'm also concerned with this:


We generally talk about any decision for unusual purchases, and either party can veto any purchase over $300. If one person says "no", it's a "no". Less than $300, if we really, REALLY want it, we get it. This is rare for us. And above $300 doesn't happen at all. We've agreed that unusual purchases must be agreed on by both or we move on.
That sounds fine and dandy to me. I think I could do this. I'm not sure she can. :P She loves clothes and shoes. She has a really hard time saying "no" to shopping.

On the flip side, I wouldn't be the one buying things from the joint account. I've had the same clothes for years and years. I only buy things I can afford. I never make payments. I don't need "stuff". So if she were to buy buy buy buy buy, and I didn't, and we had a financial problem, I could see us getting into an argument and placing the blame on her... oh man I really want to avoid that.

If she was more like me, I think your system would work. But if she's given a free pass for everything under 300 bucks, I think she'll go too willy-nilly. If I sit down and discuss this with her, that she has to make smart choices, she might be too nervous about buying things for herself, and not spend anything, which isn't what I want either.

You've talked about the positive things from 1 account. What about the negative things from 3 accounts. Obviously, I wanted choice B. :P I'm not sure why that wouldn't be a good idea? A set amount of money would automatically be deposited into separate accounts per month. She would know exactly to the penny what "free" money she would have for herself, without having to check everyday or ask my permission. And if I bought something for her using my money and my account, she wouldn't have the ability to look it up and see what it costs. :P She's so snoopy like that. If we had a joint account, I would feel like I'm buying her a gift with "our" money, when I'd rather buy it with "my" money. Otherwise, it wouldn't feel like a real gift.

There's more reasons I want separate accounts, these are just a few reasons that came off the top of my head. I had trouble thinking of the negatives of 3 accounts. If you could come up with some negatives, that would make my life a whole lot easier!

That goes for anyone, by the way, not just JB!

My $300 paragraph was strictly regarding unusual purchases. If she shops for clothes every month, then that doesn't qualify as unusual purchases... I'm just saying.

I also want to clarify, your family will have more than 1 account. But they will all be "ours".
You'll have an emergency fund, accessible cash for actual emergencies.
You'll have general savings where you two are putting money for the big purchases coming up that you're already in agreement on and saving up for.
You'll each have retirement accounts (Uncle Sam will NOT take care of you, so YOU have to plan to do it).
If you have money sitting in your checking account with no "job" to do, then it will do one of two bad things:
1) SIT there unspent and doing nothing positive for the corporation
2) Get spent unexpectedly and you'll never know where it went

There's no reason not to sit down at the beginning of each month and put a NAME on every dollar you're expecting from income. Some is named mortgage, bills, entertainment, her mad money, his mad money, shopping, food, etc. If you want to see how rich you are, do that for a few months.

When we were neck-deep in debt, and feeling broke every month, we tried this. After we paid all our bills and even put hundreds in our "play" fund, we still had money with no name on it. It surprised the heck out of us. Money was sneaking out of our account each week because forgot to TELL it what it do. Two years after starting that my wife had lost her need to buy, buy, buy, too.

Also, no matter how you couch it, you are buying gifts for her with "our" money. If you're not ready for this subtle but important distinction with the way everything happens, you're not ready to get married yet. If I'm single, I can waste my money on something totally frivolous, whether it's for myself or my GF. When I'm married, it's "our" money, so frivolousness pretty inappropriate. Not saying you can't be "fun", but you're a much better steward of shared resources, accountability is an awesome thing, and it cements marraiges firmly.

I'm confident you will stay with your multi-account system. It is not intrinsically incorrect, just keep in mind the warnings I've said about divisiveness. I can read a little of it already in your comments above regarding "my money". That's dangerous ground, so ward it off where you can.

In the meantime do what works, but keep the big picture in mind. There's more going on here than just convenience. There's some innate symbolism with marriage, some things SHOULD change and need to. It's up to you to decide if/when your accounting system is one of them.

We do a couple things.

When we got married, we got a joint account, and closed our separate accounts. ONE of us sits down and does the bill paying once a week. (this has changed hands a couple times since we've been married--it has burned us both out in the past and then we just switch for a couple years).

$400 every month goes into savings, for emergencies (and if they never occur--eventually this is our down payment on our house).

We both are trying to SAVE money, so we just kind of stay in a budget--lunches out during the week, extras at the grocery store, that sort of thing is just accepted, as long as it doesn't get extravagant.

All purchase over $300 are agreed upon mutually.

We BOTH ask permission from each other to spend more than $50 that isn't part of day-to-day expenses (like the grocery store, cleaning supplies, things NEEDED for the house). If I want to go shopping, I check the account balance, and tell my husband I'm going. If he wants a new video game, he tells me he's spending the money.

My inlaws do the his/hers/ours accounts, and my parents do the separate accounts with each paying specific bills and buying specific items. It works for them.

Really, you have to decide what will work for YOU, and I really recommend writing it down so there are no arguments later about it.

I'm confident you will stay with your multi-account system. It is not intrinsically incorrect, just keep in mind the warnings I've said about divisiveness. I can read a little of it already in your comments above regarding "my money". That's dangerous ground, so ward it off where you can.
I honestly don't care about money as much as I care about the freedoms it can bring you. I hold a Bachelors Degree in Mathematics, so all my life I have been devising a plan to make me a millionaire when I get older. (All Mathematicians do this, it's like a complicated equation that we have to solve!) I have stuck to that plan and I am very confident I will make it. I did not, however, take into account a life partner when I made that plan (hahahahaha), so that's why we are having this problem now. She was a spender (not so much anymore), and I'm not. Since the potential for free spending could throw off the plan and create arguments, boundries needed to be set.

My money = my money because it buys my things. My pants, my shirts, my little man-toys, etc. All stuff that I'll use that she'll never use. That little 5-10% or so each month would be "my money". The same 5-10% would be "her money", the rest would be "our money". I don't mean "my money" to mean the money that I earn or that I deserve because of who I am. It's just what is given for personal use, and was easier for me to differentiate between what's mine and what's hers.

The only disagreement we had on how to split up the funds for personal use was if we should get separate accounts or not. That's where we disagree. As a result of this thread, we both disagree less with each other. At least we have time to figure it out!

My inlaws do the his/hers/ours accounts, and my parents do the separate accounts with each paying specific bills and buying specific items. It works for them.

Really, you have to decide what will work for YOU, and I really recommend writing it down so there are no arguments later about it.
Wow, and you do the "all in one account" and that works for you. All 3 different things! Thank you for sharing!

I think it starts not with money, but working together to share responsibilities that benefit you both. Knowing each other very well and establishing how this will work, goes a long way. You can do anything if you agree on the boundaries before hand, and stick to them. Lol, but the idea is to get a plan you agree on, and be able to change directions together when need be. Living within your means, and being happy about it is the goal.

When it comes to money in a marriage, there is no one size fits all. It depends on the individuals, and the kind of understanding you have. There are 3 diffferent types of couples:
1. Spender+Saver
2. Spender+Spender
3. Saver+Saver

You may need to figure out which kind of couple you are, and work your finances accordingly. Both me and my husband do not have either option a) or option b).

We have our own separate accounts, still it works out. I am the saver and he is the spender. There was a time when he made more money than me, now we make equal, and tomorrow he may be earning more than me.

My account is the savings pool for us, the umbrella for the wet days, the mortgage payment is from here. His account is the lifeline, where our day to day spendings, bills etc go from. Anything expensive we have to buy, and if his account is short, and we can afford it, then it comes from my account.

It's best to write down on paper what each month's recurrent spending will be for you both - mortgage, electricity, phone, cable, food, gas etc. Then plan out how much you are left with and how much you need to spend/save on entertainment, dresses, your hobbies etc.

As for us, we never differentiate on our personal expenses, all the time he pays for whatever kick knacks we buy for any of us, like garments, jewellery, etc and it never even occurred to either of us that "he is spending on himself" or "she is spending on herself". But works out as I said earlier, I like to save so I usually stop him if I feel we are going overboard.