Chris Hicke argues for couples to have both a joint account and separate accounts when looking at overall finances. What do you think?
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A recent story in The Wall Street Journal asks a question that all couples should consider: is it better to share finances in a joint account, or to have both people to maintain separate accounts? The WSJ looks at both sides of the discussion. In making a case for sharing accounts is the trust and accountability that comes with seeing all financial expenditures, making sure both people are contributing fairly and are completely aware of their financial situation. The argument in favor of separate accounts states that, while couples at this level in their relationship need to be open with their finances and expenses, each person may well have spending habits that aren’t in line with that of their partner, which could lead to unnecessary friction if one is a spender and the other a saver.
I argue that both sides have merit—and, in fact, I’d argue for having both separate personal accounts and a joint account when it comes to managing finances with a partner.
The way I see it, couples making this decision are likely to, at the very least, be living together, and thus are jointly responsible for expenses such as food, rent, utilities, and what have you. Other things, such as vehicle insurance and phone bills, can certainly be included, but may also be left up to each individual, based on whatever arrangement works best. This way, the cost of necessities can be accounted for and contributed to by both people; it will help ensure that these costs are covered fairly and openly, while making sure that both people are aware of how much money they need to earn to get by.
I’m also in favor of personal accounts for many of the reasons stated in the WSJ. While I don’t consider myself much of a spender, I am prone to the occasional splurge, and have hobbies/side jobs that accrue their fair share of expenses. As long as I cover my share of living costs, I see no reason to trouble my partner with such things (disclaimer: I’m currently single, but this is something I find myself thinking about). Yes, there are certain expenses that I’d be more than willing to discuss instead of simply going through with them (guitars are not cheap), but, by the same token, I don’t entirely see how smaller things (guitar strings, snacks, the occasional book or album) would be much of a concern. That, and I have a tendency to spoil my partners when I come across something I know they’ll appreciate; I’d rather not have a bank statement spoil the surprise.
Of course, this entire discussion about finances is one that couples, married or not, need to have once they reach the point in their relationship that they begin to share expenses. Like most other problems that arise, communication is key to solving it, and this is certainly one aspect of life that cannot be simply swept under the rug. Speaking, as someone whose income is largely freelance, it is crucial that there is an agreement as to who contributes how much to shared expenses, and to discuss what happens if someone falls short of this agreed amount, sudden expenses like vehicle or appliance repairs, or any of the myriad of things that occur in life. It would probably even be worth discussing what to do with unexpected windfalls, such as bonuses, commissions, or even unexpected lottery winnings. Failing to have this conversation is a great way to guarantee the relationship will fall apart.
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photo: byebyeempire / flickr