Should Couples Have Separate Bank Accounts

It's a deceptively murky question without a straightforward answer. When couples get married, there is a legal binding of finances and financial responsibilities. In many cases, setting up a joint account can make achieving collective financial goals easier and measuring each spouse's contributions clearer. But it's not without its downsides – the most noteworthy being a (real or perceived) loss of financial independence.

A recent survey revealed 58 percent of couples have a joint bank account. The number rises to 65 percent for couples aged 55 and older but drops to just 29 percent for millennials. Such a wide spread makes it difficult to take your cue from the majority.

Ultimately, couples need to do what's right for them – what will help them achieve their financial goals, keep both spouses accountable, the lines of communication open and encourage an equitable sharing of financial responsibilities.

To help you make that choice, here are some factors you may want to consider:

Advantages of Separate Bank Accounts

1. Empowers individuals and eliminates power struggles around money
2. Creates a buffer between partners who may have different goals or approaches to money
3. Protects one spouse from a garnishment of bank funds if the other encounters debt trouble
4. Allows each partner to retain financial independence
5. Ensures both spouses remain financially literate
6. Gifts have more meaning if they come from an individual's rather than a joint account

Advantages of Joint Bank Accounts

1. Prevents money secrets
2. Encourages couples to communicate and set financial goals together
3. Allows couples to properly budget
4. Ensures both spouses are taking responsibility for family finances
5. Reduces bank fees
6. Makes accessing money easier in the event one spouse passes away or falls critically ill

Best of Both Worlds

There's no reason the conversation about joint or independent bank accounts need be black and white. Many couples keep their own chequing accounts for regular spending but also contribute to a joint account to pay shared costs – such as rent or mortgage, utilities, groceries, insurance and whatever else they agree to pay collaboratively.

If you opt for this solution, we generally recommend each spouse contribute a close approximation of their share of the total family income to keep things fair. For example, if one spouse brings in 62 percent of the household earnings and household costs are $3,500, their contribution would be between $2,100 and $2,275 per month.

It's About Communicating

Whether you choose to have separate or joint bank accounts or a mix of the two, a willingness to have open and honest conversations about money is essential for relationship success. Full disclosure is critical. The same survey above also found that 78 percent of the happiest couples discussed money at least once a week. Conversely, 42 percent of the unhappiest couples regretted waiting too long to talk about their financial issues.

Establish financial goals early. Review and update them regularly. Understand the role you and your spouse each play in achieving those goals and work together to make them a reality. We often talk about the negative role debt and finances have in relationships – but the opposite can also be true. When you and your spouse are on the same page when it comes to money, that can be the recipe for a happy and prosperous future.

Life-Changing Debt Solutions

Help is available for couples who have found themselves in a situation of unmanageable debt. During a Free Confidential Consultation, a Licensed Insolvency Trustee will review your finances and explain your options. Whether you qualify for a life changing debt solution such as a Consumer Proposal or bankruptcy or better suit another option – they will help you make the best choice for you. Defeating debt and getting you on the path to a financial fresh start.