Ask the expert: separate or joint checking accounts?
April 12, 2011
Q: I just got married, and my husband and I want to combine our bank accounts. Do you have any advice about how we choose between his bank and mine, and how to handle things like who is responsible for balancing the checking account, etc.?
A: Having a unified financial plan, which includes being totally open with your spouse about your financial situation, is very important to managing money effectively and harmoniously when you get married. In fact, these are things that should be discussed in detail before you get married. However, that does not mean it's necessarily the best course of action to completely share your finances.
Consider this approach: combine your savings accounts into one, but keep your checking account separate. Have an agreement for how much each of you should contribute to the savings account or other savings vehicles, and periodically review progress towards those goals together.
This approach allows you to work together when it comes to building your financial future, but still have some independence about day-to-day activities. It also solves the record-keeping problems inherent in a joint checking account - it is very difficult to keep each other fully up-to-the-minute on transactions, and if you are keeping a tight balance this could result in overdrafts.
Incidentally, a separate approach is also a good idea with credit cards, as long as you each come clean with each other about any lingering credit card balances. Having your own cards simplifies record-keeping, and also helps you each keep your credit histories separate - something that may come in handy down the road.
As for combining those savings accounts, since service isn't a big issue with savings accounts, you should choose between your bank and his depending on which offers the highest interest rate. Of course, you could also use this as an opportunity to shop for the best rates for savings accounts.
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