A Joint Bank Account Strategy for Couples

by Mr. Cheap

I’m a feminist (of the Cathy Young brand of equality feminism, not the cuckoo-for-coco-puffs Andrea Dworkin or difference feminism brands of feminism).  Sometimes I’ve grappled with the best way to divide expenses within a romantic relationship.  As an ideal, splitting the costs evenly seems to make sense, but I’m certainly aware that often two people will differ in their disposable income or earning potential.  The actual mechanics can sometimes be difficult, with each person thinking they’ve paid more or becoming amateur accountants trying to balance the various expenses.  In the past, I’ve typically taken a generous view and offered more than strictly half (and have never come to regret it), and have had the good fortune of having mostly dated women who insisted on keeping things fairly divided.

One couple who I was friends with ran into a problem with this while dating as undergrads.  He had a fairly “macho” view of masculinity and dating and insisted on paying all the bills whenever they went out.  Eventually it got to a point where dating was costing more than he could afford.  He discussed this with her, and her reaction was that she wanted things to be more fair and was happy to contribute when they went out.

The guy initially thought this was ok, but told me he was humiliated whenever she paid and he would have to slip off to the washroom because he was so uncomfortable with her paying the bill.  I thought this was kind of lame of him (get over it!), but I thought their solution had some merit.

Basically, they opened up a joint bank account, got a debit card for it, and would always add equal amounts of money to it (so when it got low they’d add $150 each to it or whatever).  They’d then use it to buy anything that they wanted to pay for “as a couple”.  Instead of having to keep a mental tally (I paid $39 for dinner two nights ago, then you paid $21 for the movies, but I paid $7 for the popcorn…), by using the account they were guaranteed that they’d split the bills down the middle.

The other “benefit” was somewhat lopsided.  He would always pay with the communal account, giving the appearance that he was treating (when she was stealthily paying half).  If she didn’t protest, why should I?

All sorts of variants are possible on this for all sorts of situations.  Instead of setting up a joint bank account it’d be possible for one person to use a credit card solely for couples activities, then they split the bill every month.  In addition to a romantic couple, this approach for splitting expenses could be used for friends (2 or more) who are traveling together and want to split all expenses.

If one person earns more than the other, they can decide whatever split makes sense, then still use this approach.  If the girlfriend earns double her boyfriend’s salary, she can put double whatever he does into the account and they’ve neatly split all bills 1/3rd to him and 2/3rds to her.

There certainly can be dangers to shared accounts.  We’ve probably all heard stories about one member of a couple being left with bills after the relationship ends (whenever I see one of those court shows on TV it seems these are almost the only cases they get).  You’d also want to limit how much cash and credit was available in such accounts in case someone goes nuts (I recently mentioned in a  post about the brother of a friend who had $10,000 of his money drained from a joint account after his fiancé went on a weekend gambling binge).  There’s also the chance that your partner might make an impulse buy with the joint account (shoes he just has to have, or her buying drinks for men with loose morals in bars).  If your partner is doing this sort of thing (or you’re worried they will), do you really want to build a life together with them in the first place?

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{ 9 comments… read them below or add one }

1 Ken

I don’t recommend that couples combine accounts until they are married. Combining before marriage (commitment) can get very messy should it not work out. I guess its an individual thing.

2 Mike

Your friend sounds a bit weird about money – but whatever works! 🙂

3 Miranda

When we married, we combined our finances into all joint accounts. It’s been working pretty well. But prior to marrying my husband, I always got to a certain point in the relationship where I felt uncomfortable with letting the guy pick up the tab. Oddly, a lot of them were like your friend, and were embarrassed if I paid. I think it has to do with long-held societal traditions that the man takes care of and provides for the woman. At any rate, my husband is a little different from other guys I’ve been with, in that he doesn’t mind the fact that I’m the one with debit card. Where we’re at, they always just automatically hand him the bill, but he just passes it to me…

4 guinness416

I’ve never really “dated” (we don’t really do that as students in Ireland and I moved in with the husband a couple of days after meeting him) but would be a bit miffed about macho/mad men guy. What would happen if I got a big raise and was out-earning him?

I guess the joint spending account works for people because I see it proposed all over the place but frankly it seems like a bit of a pain in the arse to me (as do the “allowances”, ugh, always proposed). Just combine it all or keep it all separate, says I.

5 Michael James

Implicit in your discussion is that each person in a couple keeps and spends their own money with the issue being who pays for “joint” things. My wife and I never thought that way after we got married. Even though we maintain separate bank accounts and trading accounts, we think of all money and major possessions (like the house) as jointly owned. The one of us who pays is the one who has a credit card handy or who has enough money in a chequing account. If either of us is short of cash, the other just hands cash over with no accounting. I suppose this only works because we both handle money well and are reasonably frugal.

6 Four Pillars

We do the same as Michael James – it’s an obvious solution for us since I’m the one with the paycheck and Mrs. Pillars is the one with the hard job (and no paycheck).

I think separate finances can work if both spouses make roughly the same amount of money ie the higher earner makes within 50% of the lower earner. Beyond that and it would get a bit ridiculous. One person would have a much higher standard of living than the partner.

7 guinness416

Nah we keep our chequing accounts separate and I make something approaching twice as much as himself. We just have the big bills come out of my account – the mortgage, most of our savings/investments, etc – which brings it more or less back to par. This keeps it real simple/low maintenance and avoids us policing how/how much the other spends our hard earned fun money.

8 Mr. Cheap

Ken: I was thinking more about sharing expenses before a couple is married (and after if they want to keep their money separate). Whether to combine their finances or not is an entirely different topic.

Mike: yeah, I thought so too.

Miranda: That’s cool (I’ve never passed a bill over to a woman like that, your husband’s the man! ;-).

Guinness: “a couple of days”? Now this is a story I HAVE to hear!

MJ: You’re right, my assumption here was more a couple who are sharing expenses before they’ve decided to get married. I’m sure you didn’t combine all your finances on the first date (and someone paid for it, right?).

Mike-Part 2: What did you do when you were first dating?

9 Melanie Reformed Spender

When we were dating, my now husband and I would usually pay seperately for activites where it made sense and go back and forth for restaurants and such. It really wasn’t something we made a big deal out of either way. I think the younger generation has fewer hang-ups over a woman picking up the tab.

After we moved in together, we started to combine more things and got a joint account shortly before getting married. We think of our finances as one now, though we keep some seperate accounts so we each have a credit profile and access to funds in case the worst happens.

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