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Why We have Joint AND Separate Accounts

happy couple

How can you have a blog called Couple Money without discussing the topic of joint vs separate accounts? Having either joint bank accounts, separate bank accounts, or a combination of the two is a very personal and emotional topic and tends to lead to some great debates.

I want to start off saying that what we do as a couple with our money has worked well for us. Is it a perfect system? No, but we’ve been productive with our finances and have a good communication system.

First, I need to give you some back ground information and show you how we evolved with our finances .

Our Joint Financial Goals

It’s hard to map out something without some sort of destination. We were chatting about goals that we have that we’d like to achieve. It had started simple when we were getting married. We wanted to pay off debt I had acquired, develop an emergency fund, and save money for a house.

Almost 3 years later, we are moving along with our goals and developed a new one.

  • Have no debt except for our mortgage. Currently we don’t have credit card debt or car payments. The only debt left right now is student loans which has a low interest rate.
  • Have a steady mobile income of $50,000/year or more. If we have no debts except a mortgage this would work well for us. This can from freelance work (which is my main source of income now), work from home, or passive income. We’re going to explore options as they become available. Our time frame is 5 years, so we have some work to do.

For ideas on how to execute this plan, I read succesful bloggers like Chris Guillebeau. I rather get information from someone who has gone through the process than a book smart person with no real world experience. We do have some personal goals as a couple and we’re working together to achieve them.

Our Joint Bank Accounts

Proportional Budgeting

We’re currently using proportional budgeting to determine how much each of us puts into the joint accounts.It’s been adjusted a bit as our finances have changed.  Originally the deposits were based on the ratio of our income to the family’s total income and were both deposited into joint checking.

Here’s how it worked :

Family Income

  • Person 1: $2100/month
  • Person 2: $1400/month
  • Total Income:  $3500

Family Expenses

  • Bills: $2800/month
  • Person 1 brings in 60% of the income.
  • Person 2 brings in 40% of the income.
  • So here are the deposits:

Family Deposits

  • Person 1 deposits $1680. That’s just multiplying the bills by 60%
  • Person 2 deposits $1120.  That’s just multiplying the bills by 40%

We feel like proportional deposits are a more fair way to handle the bills for us personally.

Now we take a slightly different path, but keep proportional deposits. We still put the majority of our money into the joint accounts, but the allocation has changed up a bit. After reducing our household expenses and having one of us on mainly freelance income, my husband’s money,75% of his net pay, goes entirely to the joint checking account and my variable income gets sent to joint savings. This has helped build our savings aggressively and kept a steady amount going to pay bills.

Automating Our Bill Payments

The key to keeping our goals is automating our bill payments and deposits. We use online bill pay and we only need around 20 minutes a month to take care of them. It’s extremely easy to maintain.

Setting it up was about a hour’s worth of time. I entered the bill names, addresses, due dates, account numbers, and bill amounts with our bank.  We set some of the bills up to be recurring, such as electric and cable. You can also set up your quarterly bills, like rental insurance. If the bill changes from month to month, I can just login and change the amount in a minute or two.

If there’s a mistake with a paycheck, such as the wrong amount was deposited, I could just sign into the bank’s site and fix it quickly.

Our Separate Bank Accounts

When you make your own choices instead of accepting the choices offered by gatekeepers or the status quo, you’ll naturally acquire both friends and enemies.

- Chris Guillebeau

It looks weird to see ‘Our Separate Accounts’, but that’s pretty much how we view them. After having money sent to our joint accounts, the leftovers are in our individual accounts. Some reasons for us having an individual checking account boils down:

  • Trust: I trust my husband and vice versa. We could (in theory) keep each other’s balances a secret, but we don’t.
  • Gifts: Yeah, I do like the element of surprise with gifts, so I’m happy that I have an individual checking account. they’re usually frugal gifts, so we’re not tucking away large amounts of money.
  • Gas/Food: I enjoy eating out for lunch with friends occasionally. I can treat others and not worry about bouncing a the joint checking account.

We can access each other’s individual accounts  in an emergency.  Some people may feel that our individual accounts aren’t ‘separate enough’ since we can access them in an emergency and share the paperwork. Others may think we’re weird to be married and have separate accounts at all.

I see having both types of accounts as being a plus for our family and while I’m sure it’s not perfect, it’s doing well. I’d love to hear how you keep your family’s budgeting system.

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Will we keep this system? I don’t know, but whatever we do decide, we’ll make the decision as a team.

by Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

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  1. I love the way you have shared how you have sat down and discussed and determined how the two of you as individuals would like to handle your money as a couple. I get so frustrated with the one size fits all approach to marriage. Especially in second marriages where two people have distinct and separate ways of doing things trying to then squash things into some sort of mold makes no sense at all. There is no single RIGHT way to do things and finding what works for you is the first giant step to happiness. Ask the 80% of couples who fight about money issues.

    1. I feel the same way – too many PF bloggers felt one way or the other. No room for having both joint and individual accounts. Trust is important in any relationship, especially when it comes to money.

      Couples have to sit down and discuss what works for the two of them and build from there.

      I’m glad you liked the post:)

  2. The system we worked out is that my wife’s income pays the joint bills (housing, food, etc) from our joint checking account and my income is split into a personal checking account used to pay my personal bills (my credit cards from before we got married & student loans) and for savings in a join account. My wife is debt free so she doesn’t have any personal bills to worry about. She is in charge of keeping an eye on the joint accounts so if she wants to buy something, she knows if we can afford it or not. The money I put in my separate account, I round to the nearest $100 for what I need, which gives me $20-$50 worth of “mad money” each month.

  3. We have separate accounts and no joint. Not an issue of trust, just don’t need a joint account so no need to do so. Here in Cairo all joint expenses are paid cash so we just draw equal money. We both live very frugal so no worries there either.

    I can’t see us ever having a joint account but who knows.

  4. I’m glad so many people have a system that works for them. My husband and I enjoy our plan, but we’re more than willingly to adjust it if needed.

    Thanks for sharing your take on couples and finance.

  5. Elle – I’m new to your blog, but thoroughly enjoy it! I like this post in particular and wish my husband and I would have kept our separate accounts for all the reasons you mentioned. When we first got married, we each had our own accounts and then we put even money (unlike your % split) into the joint to pay for bills. This past August we bought our first home and decided to put it in all in one to more easily pay our mortgage. This was one of my biggest mistakes! My husband is like a hawk with our account and it occasionally stresses me out – not to mention surprises are much more difficult. I wish I would have read your blog last July! :)

  6. My boyfriend and I have adopted the same system! We calculated the income percentages and we both contribute to bills based on our percentage. I really like your idea of putting the income for bills into the joint account but still having the individual accounts. For now, we still have our individual accounts but when we get married I plan on having both.