John and Jane, a married couple, keep separate bank accounts . . . John has his money and Jane has hers, but they do not have a joint account. Running the household finances is a bit of a challenge, but they stay current on their bills by each taking responsibility for certain payments. John and Jane, of course, are not a real couple, but (through my financial counseling practice) I have met several John and Janes over the years who have a variety of reasons for dividing – not combining – their money:
- “We have always done it this way.”
- “I like to control my own money.”
- “I earned this money, so my spouse shouldn’t have any say about how it is spent.”
- “I don’t trust my spouse with my money.”
- “He/she spends too much. The only way to keep us from bankruptcy is for each of us to have our own money.”
While some of these reasons sound almost reasonable, I always recommend that the healthiest financial arrangement for married couples is to combine their finances. Why? Read on.
5 Reasons to Combine Finances as a Married Couple
1. No dictator.
One spouse will invariably earn more than the other, meaning that one spouse will control the lion’s share of the family finances. Bad idea . . . it is never a good idea for one to control and the other to be controlled. If you carry this concept to the extreme (only one income earner in the family), the income producer becomes de facto dictator.
2. Unified budgeting and goal setting.
Jesus and Abraham Lincoln both said that a house divided against itself cannot stand . . . although neither was referring to marital budgeting, their concept is nevertheless valid. One account focused on debt elimination is working against an account based on spending. However, when these two accounts are combined, our marital team can now combine forces to achieve a unified budget designed to achieve their joint goals.
3. It forces trust.
If trust is the rationale either spouse uses to justify separate accounts, combining those accounts could force the couple to deal with those issues. Admittedly, this can be opening a hornet’s nest of issues (and sometimes these problems may need to be dealt with before combining their money), but the only way to establish trust is to bring those issues out into the open, create clear expectations and then commit to living out those expectations. I realize that these trust problems are about far more than finances, but learning to trust each other with money is a great start to earning trust in other areas.
4. It eliminates secrets.
Marital secrets are land mines to a great marriage . . . they can explode any time. When one spouse insists that, “I want to control my own money,” that spouse could well be implying that they are keeping some secrets from their spouse. If money secrets are happening in a marriage, one wonders what other secrets are going on. Combining those finances will keep both spouses in the same loop and prevent either from keeping secrets.
5. It will strengthen the marriage.
Dave Ramsey likes to say that marriage is a partnership, not a joint venture. I agree. Everything each partner brings into the marriage (be it debt or wealth), and everything each continues to earn once married should belong totally and completely to the couple. Until each relinquishes their grip on “my money” and willingly commingles it into a joint account, this couple has not fully bought into the marriage.
3 Exceptions to Joint Accounts
1. Business Accounts
My wife and I each have our own businesses and we each have a business account for our respective businesses. However, the profit from those businesses is transferred into our family account and spent in accordance to our joint goals. To avoid any possibility of secrets, we are both intentionally transparent about how well our businesses are doing.
Jan has never wanted an allowance, but I have always enjoyed having a little of my own money, so our budget includes “Joe’s allowance.” This is a cash disbursement (a modest one) which allows me to buy something for myself (usually a tool), or give it away or save it or maybe even buy something for Jan. Even though I often tell Jan what I do with my allowance, it is nice to have a bit of my own money.
3. Prenuptial Agreements
The purpose of this post is not to discuss the pros and cons of a prenuptial agreement, but I do recognize that they exist. However, I would hope that a prenup would never create lack of trust, money secrets and conflicting marital goals which could undermine a marriage.
Am I saying that all marriages who operate with separate accounts are destined for disaster? Of course not. But I am saying that those separate accounts are either an indicator of existing problems or a formula for future problems.
All the money is to be managed by the married couple for God. Couples should make every attempt possible to treat it that way.
Do you and your spouse have separate accounts in lieu of a joint account? Why? What advantages/disadvantages have you experienced?