Awhile ago, I received an email from a reader, Heather, about the division of finances in a relationship.
…I myself adore beautiful items and luxury goods but of course like many people, I will have to save up for any items I really want to own. I am a newlywed myself and my belief is to have a separate personal bank account aside from the joint account. Some would call this a “personal stash” and a betrayal to the marriage. However I think that this isn’t be a betrayal if my husband is aware of it and contributions to the joint account are made equally.
Do you believe in spouses having separate bank accounts? If yes, does that mean all household expenses are to be split accordingly? Do you feel that having a personal bank account and a joint account is a matter of personal control over one’s finances and possibly security?
This is a question that I’ve received more than a few times from readers. It’s a topic that’s very personal and in the spirit of transparency, I’ve answered with my own personal experience, in an effort to be as open about the topic as possible. It’s a big topic with of course no “true” answer” so I accordingly, I have a long response – you’ve been warned!
On the topic of joint bank accounts and what I personally do…
In our household, my husband and I maintain separate bank accounts as well as several joint accounts. We each had our own savings before we got married, and built up our own equity. When we got married, we opened several joint accounts with the idea that we’d each deposit 80% of our take home pay (after 401k and the like) into our joint account, with the remaining 20% going to our individual accounts. The idea was that any crazy frivolous purchases and wants would come out of those accounts.
This worked for a while, and it was a nice transition for both of us. However, after a while it got to be kind of a pain calculating out that 20%, especially with job changes, raises, etc. And, we were basically paying everything out of our joint anyway. So early in 2012 we began combining all of our income into our joint accounts, while still maintaining our existing separate accounts. Basically 100% of our purchases are paid from our joint account, with a few rare exceptions.
This has worked out so far for us. Any big purchases we make sure to mention to each other beforehand, and my husband is very understanding about my shopping. On my end though, I make sure always to be responsible as possible, never go overboard, and we have fairly aggressive savings targets that we hit monthly, quarterly, yearly before spending anything else. If we can’t meet our savings targets, we don’t spend. I manage our joint finances (savings, investments, budget) and I care about our financial future much more than a new bag or coat!
And finally, my husband has full transparency and insight into my personal accounts, and vice versa. And to Heather’s question above, neither of us views these accounts as a betrayal!
And on that note, onto luxury purchases…
It is my opinion that each couple will find a system that works for them when it comes to luxury purchases. I know that’s kind of a cop out answer, but it’s true. We happen to pay for my luxury goods together, out of our joint funds, but if I wanted something really crazy and out of the comfort zone of our joint finances (like that excellent stack of yummy Van Cleef bangles above), I wouldn’t feel good or responsible about using our household accounts to pay for it. In situations like that, I do appreciate having the freedom of my own money, to spend how I want.
And that leads me to my strongest held belief when it comes to couples and big purchases – no matter what a couple chooses to do, they should be on the same page, and completely open with each other. No matter whose paying, I believe that both parties should know what’s going out, and what’s coming in. It’s simply a matter of financial transparency and knowledge. Even if your partner doesn’t necessarily want to pay for your “luxury” purchases, I still think that they should be comfortable with knowing how much you spend, and you should be comfortable with them knowing that too.
And finally, on personal accounts and security….
This is a difficult topic for me to write about, since it’s so personal. For me, having my own account was always the status quo. I grew up in a household where my mother always worked, and I’ve more or less had a job since high school. I enjoy the freedom of working and having an account that is just my own, and the security it brings as well. That feeling of course has nothing to do with my husband or our relationship, it’s something purely for, and about myself.
That being said, I don’t necessarily think that one needs to have their own personal account in a marriage. I have to repeat myself here that in my opinion, different systems work for different couples. You can have your own account, or just have a joint account, and manage the money, or not. For me, the most important components of a healthy relationship are a knowledge of the household’s finances, and complete transparency on both sides about spending, income, and savings. Hopefully all of thoes components are in good shape…with some room to spare for some little luxuries for each of you!
Wow, that was long, and there was so much that I didn’t even cover! I would love to hear all of your opinions on Heather’s question – and if you’d like, to hear what you do in your households and how you split your finances. Thank you for reading and for your input!