Joint or Separate Checking Accounts?

Tips on How to Decide and How to Make It Work

Couple at laptop discussing paperwork in a living room
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These days, it's not necessarily a given that newly married couples will merge their individual checking accounts into one joint checking account. Finances are often complicated by previous marriages, child support or alimony, student loans, existing mortgages or credit card debt, and other issues such as a sense of autonomy and financial independence.

Sometimes combining all income into a joint checking account can muddy the waters, add confusion and complications, and cause resentment and power struggles. So what's a couple to do?

Before you tie the knot, talk about how you'll mingle your money. Calmly express your opinions and discuss the ramifications of the different options:

One Joint Account

One option is to each put all of your earnings into one joint checking account. If you're both comfortable with this approach, it's certainly the easiest logistically. If one of you is deeply in debt or is notoriously bad at keeping track of checks and ATM withdrawals, this may not be the best method for you.

The One-Two Method (One Joint Account Plus Two Separate Accounts)

Many couples today set up a joint checking account while retaining their separate checking accounts. They each pay an agreed-upon amount monthly into the joint checking account and use this account to pay the household bills. One of the big advantages to this method is that each person retains autonomy and financial independence, which helps avoid the use of money as power in the relationship.

If the one-two method is used, come up with a method of determining how much each of you will contribute to the joint checking account. 

  1. Set up a budget, so that you know what your shared monthly expenses are and how much will need to go into the joint checking account.
  2. If you both earn roughly the same amount, it makes sense to each contribute the same dollar amount to the joint account. If one of you earns substantially more than the other, it's fairer to contribute on a percentage basis. For details on how to calculate your contributions based on the percentage basis, see the example at the end of this article.
  3. Set up a joint savings account that each of you contributes to for your shared financial goals, such as saving for retirement, investing, buying a new vehicle, taking a vacation, and paying for your kids' college educations.
  1. Continue to pay your own pre-existing credit card debt, student loans, and other financial obligations from your personal checking accounts.

Which to Choose?

Neither of these methods is right or wrong. Resentment over money can fester and eventually poison a relationship if it's not addressed in a way that satisfies each partner, so what's right is what works for you as a couple. For your long-term relationship, both of you needs to feel good about how the money works in your relationship.

Example: You earn $25,000 per year. Your spouse earns $50,000 per year, for a total of $75,000 joint income. Determine the contribution by performing the following calculations:

  1. Add your annual income to your spouse's annual income.
  2. Divide the lower salary by the total combined salaries to get a percentage for the lower paid spouse. $25,000 / $75,000 = .33 or 33 percent
  3. Multiply this percentage times the dollar amount you need in the joint account monthly to pay your shared bills. This is the lower-earning spouses' monthly contribution. .33 x $3,000 = $990.
  4. Subtract this amount from the dollar amount needed in the account monthly. It is the higher earning spouse's contribution. $3,000 - $990 = $2,010.