3 Money Management Methods for Couples

Posted November 28 2014
by PenFed Team
man and woman with laptop and tablet

Being part of a couple means shared responsibilities, including financial ones. A partnership in life doesn’t have to mean a partnership in your bank accounts, though, and the decision on how—and if—to pool your financial resources should depend more on your personalities and spending styles than assumptions about sharing everything down to the last penny.

1. Joint accounts.

The traditional method of handling finances when you’re part of a couple is to throw all the money in one big pot: combined savings, combined checking, combined checking and savings accounts all the way. Especially if you’re just starting out, it can make more sense to make your resources more readily available to both people. If you choose to use joint accounts, you’ll have decide together who will manage the accounts (one or both of you) and what the rules of bill paying and discretionary spending will be. One drawback of this method is the lack of privacy; the other person will always be able to see what you’re spending, so there’s no potential for surprise gifts.

2. Both joint and separate accounts.

Also known as the “yours, mine, and ours” method, this division of finances lets you indulge in your differences while still pooling funds for household expenses. You’ll make a lot of account-to-account transfers with this kind of arrangement, and you’ll still need to agree who will be responsible for overseeing the joint account and bills. Automatic payments and transfers go a long way toward keeping everything organized. Maintaining a joint account that covers basic household and family expenses is a smart strategy for families in which one or both partners are likely to be deployed, since the other always has access to the main household account.

3. Entirely separate accounts.

If one of you is thrifty while the other is an extravagant spender, keep the peace with two separate accounts. People who get together when they’re older, including divorced and widowed people, often feel more comfortable keeping their finances the way they already are. Keeping finances segregated is often necessary to protect the other person when one person has bad credit, a huge load of debt, or expensive ongoing medical issues. The downside to separate finances: You won’t know if the other person is overspending and running up debt, letting responsibilities slide with missed or late payments, or neglecting to save for the future.