Erica and Jordan at the The Worth Project have the goal of sharing their personal finance experience to help readers improve their financial lives. We regularly partner with companies that share that same vision. Some of the links in this post may be from our partners. Here's how we make money.

If you want to wade into an emotionally charged topic, this is it: money, relationships, and how to do it right. The only topic that might elicit a more emotional response is parenting (which we’ll steer clear of here). But really, is there a *right* answer to the question, “how should married couples split their finances?”

I was once having lunch with a newly married couple when the wife commented that her husband still had a bank account that was set aside for his “fun” money. This irked her because as a married couple she felt like things should be 100% combined and they should make all money decisions together. He didn’t want to close the account. She expected I’d immediately jump on her side. 

I didn’t bite. There’s no one way to handle money in a relationship. She wanted to combine everything but her husband wanted to be able to buy football tickets or a round of drinks without considering how it would impact her spending. He wanted to hold onto a little independence, she wanted to go all in. Neither way is right, but it’s important to find a strategy that works for both people, rather than get frustrated because one person won’t heed to the other. 

On the other end of the spectrum, I was having lunch with another couple a few months later and one person remarked that they still kept their money almost totally separate. She was almost embarrassed to admit it because to her it felt like an unconventional way to handle money. But they were both happy with it, so why change it?

So how should married couples split finances and their money responsibilities? I’ve talked about how we split and share our money, but that approach isn’t right for everyone. Read on to find the strategy that works for you. 

 

How do married couples handle finances?

Because I love knowing how other people do things, I really wanted to see if there was any data out there about how people handle this topic. There are headlines that proclaim that millennials don’t open joint accounts. On the other side of the spectrum, people say that keeping money separate will most definitely lead to an unhappy marriage. But the truth is that how people handle their money is a bit mixed. According to a TD Ameritrade survey, 82% of people living together have a joint account. But 42% of people living together also keep a separate account. 

So married couples handle their money in all different ways, none of which are wrong or right in every situation. 

 

Should married couples have separate bank accounts?

Here’s where the conversation starts to get tricky, like for couple number one above. One person wants a separate account, the other doesn’t. Should they or shouldn’t they keep some of their money separate?

 

Benefits of a joint bank account

  • Full financial picture: Sitting down to look at your financial standing and doing budgeting each month can be a chore. But when all money is jointly owned, it makes looking at the full picture much easier. Assessing spending and saving towards goals is much easier when you only have to look in one place to get a view of it all. (Really want to make looking at everything easy? Here’s how we manage our money in 15 minutes per month with Personal Capital.) 
  • Transparency: Financial infidelity is a big problem, with a CreditCards.com survey finding that 28% of millennials are currently hiding money from a partner. While having joint accounts won’t solve that problem (someone can always hide money if they want to) joint accounts do promote transparency. Nothing is off-limits and for some, that level of openness is comforting. 
  • Makes things easier: Joint accounts are convenient. There’s never any calculation about who needs to pay how much and it can streamline your financial process. It can also help in the event that one person passes away, access to money for the surviving spouse is easier. 

 

Drawbacks of a joint bank account

  • Loss of independence: If for years you’ve been spending your money however you see fit, it can be a rude awakening to have to OK your spending with another person. While your partner may really not care about your spending it may still lead to feeling like you don’t have control to make even small spending decisions independently. 
  • No financial safety net: If you need to leave a bad situation, it’s that much more difficult to do if you don’t have any of your own money. Not having some money of your own can lead to having to stay in unhappy (and potentially dangerous) situations because you don’t have an out. 
  • Increase financial conflicts: If your partner loves something that you think is ridiculous (insert expensive bottles of wine, sneakers, designer sunglasses) you may constantly find yourself trying to justify the splurge. Over the years, that tension can wear on a relationship. 

 

How to split bills based on income or other factors

There are a number of ways to split things up (or keep them combined) based on what works best for your relationship. Some approaches you might consider include:

 

One joint account for household spending

For all bills that are included in running the household (mortgage, groceries, childcare), each person contributes a set amount to a joint account. Everything is paid out of there. The contribution can be equal — each person contributes 50% of the total. Or it can be divided based on income — the higher earner would contribute a percentage that matches how much they earn. All other money is kept separately. 

A serious downside here is that if one person stops earning an income, they won’t have any of their *own* money. 

 

One separate account for personal spending

This is the exact opposite of the scenario above. Paychecks are deposited into joint accounts and each person has a set amount (an allowance, if you will) to a separate account. The set amount can be equal or it can be based on income. 

 

Divvy up the bills

If you want to keep things completely separate, you can each decide who will pay what bill. For example, maybe one person pays the mortgage and utilities while another person pays the childcare and groceries. To make this equitable, as income changes, the bill distribution will need to change. 

(Looking for more? See: five ways to manage money in a relationship)

 

How to both stay in the know

However you decide to combine or split your money, don’t forget this one important point. Both people in the relationship need to stay educated and in the know when it comes to money. Maybe one person has a natural inclination to handle the investing or one person is better about paying bills. It doesn’t matter: both people need to stay informed. 

Jordan and I have found that the very best way for us to communicate and talk about our money is to use Personal Capital to aggregate all of our accounts. We can dive into our retirement accounts, check out Henry’s 529, and look at our spending, all in one place. And because this seriously cut down on the number of disagreements we had around money, I’m a huge fan. Read my full review and watch the tutorial I created

If you’re not into financial programs or you’re just warming up to the idea of both taking ownership in your money, use a spreadsheet or a notebook, and have a regular discussion about your money: your goals, how it’s being spent, and where it’s being invested. 

 

What to remember on splitting finances

There’s no right answer to the question as to how married couples should split money. What matters most is that communication around this topic is always open and both people completely understand the financial situation. Beyond that, well, you do you. 

 

Erica Gellerman Bio The Worth Project

Erica Gellerman is a CPA, MBA, personal finance writer, and founder of The Worth Project: personal finance and family travel. website. Her work has been featured on Forbes, Money, Business Insider, The Everygirl, The Everymom, and Lifehacker. When she's not writing about personal finance you can find Erica exploring Europe from her temporary home base in London.

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