Keeping it Separate

Because I think it’s something interesting to write about for a Personal Finance website, I thought I’d write in response to Nelson from Financial Uproar. He wrote in his “Sunday Morning Link Dump”, and talked about how he couldn’t figure out “why married couples feel the need for separate bank accounts”. My wife and I happen to be one of those weird couples who keep separate bank accounts. We’ve been married for five and a half years now, and have been what could be described as financially linked for an extra couple.

Not only do we not have any shared accounts, we haven’t even set up electronic transfers between the two of us. This fact isn’t due to any reason other than we’re by nature kind of lazy with paperwork, electronic or otherwise.

We keep separate accounts mainly because we haven’t found a reason over the length of our relationship to combine them. Maybe if we had kids, or even a goldfish together, there would be enough of a reason to make it worth our while to just have one large shared account – rather than have everything kind of fractured off as it is now. We have about 8 bills per month that we have to pay. We split the bills up, put a certain amount of money towards our “fun savings”, a good chunk towards retirement savings and the rest is ours to spend every month.

This system works for us, it’s not a trust thing, it’s more of a “don’t talk to me about the disposable clothes I buy, and I won’t talk to you about all the stupid golf you play” that we’ve worked out over our years together. If for whatever reason I want to know how much money we have to spend on a potential weekend trip to Niagara Falls, I can ask and find out – the same way my wife can find out how our retirement finances are going, or how we were doing in paying off our mortgage.

We both understand how divorce laws work. We both understand about shared marriage properties work, along with my pension and any other savings that may be somewhere. We just feel that for the spare couple hundred bucks we get to spend every month, we’d rather not have that in a shared account.

Maybe the whole thing works because we don’t have any spare money around – there’s not a lot of “wiggle room”. We never really thought about another way of doing things – I was 25 and had looked after my own money from 17 on, and my wife was the same way. I’m not sure at what point it would have seemed natural to start dumping money together. We haven’t gotten there yet, but maybe after a major job change (like getting fired or laid off), or when we retire it will seem like the right time.

At what point did you combine finances (if you did) – how did it start?

11 thoughts on “Keeping it Separate”

  1. After being together for 4 years and then purchasing a house together (aka getting a mortgage together) that is when we combined finances.

    Your statement “This fact isn’t due to any reason other than we’re by nature kind of lazy with paperwork, electronic or otherwise” seems contradictory with all the extra work having separate accounts creates (i.e. Having to calculate the splitting up of bills).

    A much easier way is to calculate your monthly joint expenses (mortgage, insurance, cable, utilities, grocery etc) and have that amount (plus any joint savings buffer/emergency fund) be deposited into a joint account. All the house bills and shared expenses get paid from that joint account. Each person retains their own RRSP/TFSA/other etc. and “fun money” that gets directly deposited into an account in their name.

    That way no questions about how fun money is spent (when its gone its gone) and shared bills are easier to pay – no more hassle of splitting them up.

    Review periodically to ensure amount going into joint account is sufficient.

  2. Married for 13 years and we still don’t have joint accounts. We do have our accounts linked (all with the same bank) so when I log online I can see her chequing, Visa and investing account info and she can see mine. There is zero hiding and we often transfer money from each other when needed.

    The primary logic in having separate accounts is ease of tracking transactions. For example we both use our separate Visa accounts for business and a typical month there would be 30+ transactions in mine often exceeding $10,000. Its just easier looking at the activity knowing its all mine and not seeing all of my wife’s activity and having to ask her about it… “honey did you spend $75 at such and such place last Friday?”.

    My wife and I never fight about money and have the same goals so the separate account thing for us just makes life and record keeping a little easier.

  3. My wife and I just felt that a great marriage is a union in all aspects. So once we were married, finances were combined – for us, it was a no brainer.

  4. Joint or separate accounts is really a personal choice and depends on the couple. If it works for you and your wife then no need to change it. We have a joint account just to keep things simple.

  5. When we bought the house together, we opened a joint account to pay the common bills, but kept our own accounts. Each month we’d deposit our share of the house costs.

    When we got married, we switched to just the joint account (plus a business account). We have a joint credit card and each have another credit card personally that rarely gets used. All of our discretionary spending is tracked and needs to fit into the budget.

    I think your system would work too because you’ve accounted for everything anyways except the small amount you get to blow.

  6. We combined before we got married – we did a trip to Disneyland 6 months before getting married, and it was easier for my then-fiancé to pay for everything as his bank was affiliated with one in the States and so he didn’t pay banking fees. After we came back it just seemed to make sense, as we were buying a house at the time. My husband is in the navy and is often gone for months at a time, so having joint accounts means he can stay completely on top of everything.

    Like Tawcan says, though, it’s each couple’s choice, and what works for us certainly wouldn’t work for everyone!

  7. We keep most things separate. We were married at 31 and were used to managing our own money. There’s no reason to combine anything at the moment (healthy DINKs) and several reasons to not. One reason is to always feel we can spend our money however we want. It’s more psychological than anything, but that’s important to us. A bigger reason is our investment decisions. My husband is completely against investing any of his hard-earned money in the stock market, while I am completely against not investing most of my money in the stock market. There’s basically no middle ground between us, and since RRSPs and TFSA are individual anyhow, we just do what we feel is best with our own money.

  8. I see no reason to combine but my husband and I have talked about money since before we lived together. I think the more important issue is that both people feel that they are both represented well in terms of pulling their weight, financially or otherwise. I also firmly believe that both men and women should be able to manage money/household finances and that some money should always be unaccountable to the other. If accounts are split, there should also be information/instructions on how to access if one dies.

  9. We got a joint account when we got married/bought a house. Our paycheck’s go into there and then we have a set amount that automatically gets transferred out each month to our individual accounts. So any joint bills get paid from the joint account and any personal stuff comes out of our personal accounts. This way we don’t feel like the other is spending more of “our” money on things they shouldn’t.

  10. Married now for almost 15 years and still have separate accounts. Not a trust issue, more that we came into the marriage with separate accounts and decided there was no need to change. We looked at our bills and decided who would pay for what – I pay mortgage, taxes etc, my wife pays food, utilities etc. We both had separate RRSP’s before marriage, so continue. We do a combined household net worth every year and discuss financial topics (I am more interested in investments, so my wife often asks me what I think she should do with her RRSP/TFSA money each year). Not a trust issue, more laziness combined with personal preference (we each like dealing with the banks we had previously). Works for us.

  11. I agree with Dave on this. I am a baby boomer and both my parents worked full time and they kept separate accounts and I took that as normal. So I still do it even after I learned during divorce proceedings my 1st wife racked up a $40,000 debt unbeknownst to me

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