Despite living nearly separate financial lives, we’re hardly alone in our spousal approach of divided accounts. A study of 1,200 households by the Raddon Financial Group, an Illinois research company, found that 48% of married couples have two or more checking accounts, up from 39% four years earlier. North of the 49th parallel the crazy Canucks take a similar stance on banking. According to a recent RBC poll, one-third of Canadian couples between the ages of 18 and 35 keep completely separate bank accounts, with only ten per cent holding all of their accounts jointly.

Looking for a way to merge or separate your bank accounts? Check out the Switch Bank Accounts Checklist for some handy tips.

So why are so many couples living together but checking (or chequing) apart? Perhaps it’s due to a higher divorce rate, an increase in two-income households, or maybe it’s because more people are getting married later in life. Since I shacked up with my sweetie in my late 20s, the last point resonates strongest with me. After managing our own money in our own ways for most of our lives, making the switch to fully joint accounts just didn’t feel right for either of us.

Anyhoo, whether you’re already married, looking to get hitched, or just living love in another arrangement (yeah, I’ve been there too), there comes a time in every relationship when a banking system is needed for paying bills and managing money. And your system needs to work when income levels differ and spending habits come into play.

Should you mingle your money in a joint bank account or keep things separated? Your solution may not be similar to mine, so let’s weigh the merits of three very different banking systems, and you can decide on the best one for your spousal situation.

1. We Belong Together: Joint Accounts

Are you a couple that does everything together? Mingling your money into a single savings and checking account may either be the perfect solution or the start of some serious spousal financial strife.

Positives: As a couple with shared bank accounts you’ll streamline the money management process with fewer accounts to mind and less paperwork to file. Plus, you can save on banking fees! Paying for shared expenses (phone, mortgage, rent, cable) is also easy because all bills are paid from a single account. Lastly, there are no spending secrets when accounts are merged, so everyone’s accountable to the cash.

Negatives: “You spent how much money on lunch this week?” Good luck keeping a few splurges under the table when every transaction is open for your spouse to see. Couples banking with joint accounts have little privacy and independence since all money is pooled and neither person keeps their own ‘mad money’ account. Do you trust your partner to not drain the whole account and leave you with nothing? This method also challenges couples who make wildly different incomes since one earner may be footing a proportionally bigger chuck of the bills.

2. Keep ‘Em Separated: Separate Accounts

I doubt June and Ward Cleaver (of Leave it to Beaver fame) kept separate bank accounts during the ‘idyllic’ 1950s. I’m still wondering what Mrs. Cleaver did all day while Ward went off to work. Anyways…

Negatives: Better check your bank fees or switch to a no fee checking account ’cause the cost of keeping multiple accounts can add up fast! Separate checking and savings accounts can also make paying bills and shared expenses a hassle, especially when neither partner is financially flush enough to cover a surprise car repair. This method requires a lot of division and discussion to cover all the costs — perhaps all the open discussion is a good thing!

Five Rules for living together (and loving each other) with separate bank accounts.

1. Set Spending Limits. Discuss an expense or splurge if it’s over an agreed upon limit. For example: $25, $50, or $100.
2. Proportional Paying. Divide the bills (and debt) based on each person’s total income. For example: June pays 10% less on the cable bill since she earns 10% less than Ward. Or June pays for heating while Ward foots the phone and cable bills.
3. Monthly Updates. Run your household like a business by holding monthly (or quarterly) financial meetings with your spouse. Go over each and every account to ensure the flow of cash is working, or see if adjustments need to be made. For example: Perhaps June scored a raise and should now contribute more to the mortgage. Yay June! Use the Free Budget Spreadsheet for tallying the bills and dividing the dough.
4. Keep a ‘Mad Money’ Account. Set some savings aside for fun. Each partner should save a little dough on the side for those sexy shoes or new gadget — no questions asked!
5. Budget for Emergencies. When keeping separate accounts it’s important to put money aside for emergencies. A dedicated ‘emergency fund’ account may be the ticket your partnership needs when times get tough and neither partner is flush with funds. See How to Start an Emergency Fund on Any Budget for the details.

3. Together Yet Apart: A Combination of Both

When you can’t decide on the best money management approach for your pairing, then why not split the difference with a combination of bank accounts? When each partner keeps a personal account along with a joint household account, it’s possible to keep autonomy while being together.

Positives: If you’re dealing with debt — credit cards, student loans, etc. — then a combination system can give you the flexibility to pay it off on your own. Maintaining separate accounts also gives each person a little privacy with ‘fun spends’ and splurges without having to explain the expense to their partner. Just be sure to contribute your set amount to that joint account so all the bills and expenses can be paid on time!

The combination system can also bridge the distance when there’s a big difference between spousal incomes. If proportional paying (or financial equality) is important, then each partner could contribute the same percentage of their income to the joint account. Easy.

Negatives: Get ready for a heated discussion on which expenses are paid from the joint account. “Sorry honey, your new Fluevogs are cute, but they’re not a joint expense!” fails to make for a peaceful dinner date.

Your Thoughts: Do you keep separate bank accounts, or do you merge money in a joint account?

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A few years ago I got fed up with all the needless fees and finally fired my bank. It took me months, OK years, to muster up the courage to make the switch. Why did it take so long? Well, it’s no secret that moving an account to another bank is a major pain in the arse.

For example: you’ve got to open the new account, add some cash, notify your billers, find your depositors, link your other accounts, find your infrequent transactions, and hope to goodness you don’t miss a pre-authorized payment and incur an overdraft fee. Yikes!

But switching banks can be painless. If you’ve found a better banking deal at a nicer bank, then go ahead and make the switch with help from this handy Switch Bank Accounts Checklist. It’s got a funny name, I know. But I’ve made an American and Canadian version for all my friends who are fed up with fees. Oh, and ask your new bank for a “Switch Kit” to make the move even easier.

Canadian: Switch bank accounts checklist

Ok Canucks, if you’ve had it with the Toronto Dominion Bank (TD Bank), Canada Trust, Bank of Montreal, Royal Bank of Canada (RBC), Canadian Imperial Bank of Commerce (CIBC), or Bank of Nova Scotia then it’s time to make your move. Switching to a no-fee or lower fee account at an online bank or a credit union can save you big money over the years.

Download: Switch Bank Accounts Checklist (Canadian)

Here’s how it works:

• Gather your personal information.
• Follow the steps in How to break up with your bank
• List your pre-authorized payments (mortgage, insurance, and bills)
• List your direct deposits (employer pay, government benefits)
• Identify your internet banking linked transactions (credit cards, high interest savings accounts, chequing accounts, investment accounts)
• Check off each item when it’s moved!
• Fire your old bank

Don’t forget to also switch your pay deposits with your employer by providing a voided cheque. Getting paid is kinda nice.

American: Switch bank accounts checklist

I’ve seen the news. Americans have dealt with a lot of banking turmoil in the past years. So if you’re ready to find a better bank and move away from Bank of America, Chase Bank, US Bank, Wells Fargo Bank, National City Bank, Bank of American Online, or Tyra Banks (kidding), then use this checklist to make your move.

Download: Switch Bank Accounts Checklist (American)

Here’s how it works:

• Gather your personal information.
• Follow the steps in How to break up with your bank
• List your pre-authorized payments (mortgage, insurance, and bills)
• List your direct deposits (employer pay, etc.)
• Identify your internet banking linked transactions (credit cards, high yield savings accounts, checking accounts, investment accounts)
• Check off each item when it’s moved!
• Fire your old bank

I hope this checklist helps make firing your old bank easier. There’s no sense in wasting a good mood by complaining about excessive bank fees, poor customer service, or banking delays when there’s a better bank just waiting for you to switch.

Your Two Cents: Have you ever fired a bank? Got any switching bank account tips?

Love the blog? Get the book: 397 Ways to Save Money

Top Squawks

• How to make a budget (series with downloads)
• How to write a resume (series with downloads)
• Frugalicious Recipes
• 50 Ways to Save $1,000 a Year
• Credit Card Calculator
• Download your free 92-page eBook: The Insider’s Guide To Frugal Food & Fitness