Go ahead and call me an unromantic gal, but I’ve never merged my money with my spouse. Some may say I have trust issues or that I’m controlling with cash — none of this is true. When it comes to divvying up the dough, my sweetie and I decided years ago to keep our cash separated, and we’ve stood together on this financial issue for over a decade.

bank accounts

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.

checking accounts

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…

high interest savings accounts

Positives: Do you and your partner have very different money habits? Divvying up the dough across separate bank accounts may be the best solution when one person is a saver and the other likes to spend everything in sight. Separate finances may also be a solution for remarried couples who pay child support or alimony since it can be easier to earmark certain funds for previous family commitments. This system also works well for responsible couples who just like managing their own money.

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.

free savings account

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?