Family Money - Combined accounts vs. Separate accounts

From my experience after talking with people or reading about personal finance online, there are basically two approaches to how people run family finances when it comes to family money.

Disclaimer: I`m talking about management of family money - if you`re in a boyfriend/girlfriend situation, or just recently started living together this doesn’t necessarily applies to you. I’m talking about people who live together as a family, in a serious relationship, and who may or may not have kids together.

Combined Finances - when family has a number of joint accounts (checking, savings, credit, etc.) and run their affairs (financial that is) accordingly. They pay expenses out of joint account, deposit paychecks into their joint account, buy things with that money, and save for the future by putting money aside into their joint savings account.

Separate Finances - each partner has a separate checking account where they deposit their paychecks and pay for their things out of it. Sometimes they have a joint account for family expenses such as car payments or house payments where they transfer portions of their paychecks. Most likely they have their own separate debts (school loans or credit cards) which they pay with their own money. They might also have a joint savings account where they deposit agreed-upon amounts every month. I’ve seen some extreme examples when people run their financial lives completely separate even though they’ve been living as a family for years.

Family Money

Family Money

Now, personally I don’t understand how people live together as a family and don’t combine their finances. There are huge upsides to combining your finances and very little downside.

Benefits of running combined accounts:


  • Clarity. Having all accounts as joint accounts provides clarity to your finances. At any given point, you’ll know exactly how much you have, how much you owe, and what is your current cash flow. Doubling the number of accounts only muddies up the water and makes things difficult to see, let alone follow some sort of plan. Family money is complicated enough - why make it even more complicated by doubling number of accounts.
  • Ease of access. If my wife calls me and tells me that our Visa account is due tomorrow and I need to pay it, I have instant access to our account. If there was a problem with one of the transactions, call center folks wouldn’t even talk to me - because my name isn’t on the account.
  • Single plan of attack. When your family money are combined, it’s very easy to work out a plan of attack. How much do we want to have in the future when we retire (as opposed to how much I have to have and how much you have to have)? How much debt we have vs. how much you have and how much I have? The plan of attack becomes very simple - as opposed to doubling every single task and mudding the water.
  • Commitment. I think this is by far the largest benefit - when people combine their finances and become a family, they commit to certain goals (saving, investing, etc.), agree to specific rules (how much to spend and on what items), and become one unit of the society. I completely miss the point of starting a family and living separate lives financially - with separate goals and plans of attack. What, you miss feeling independent? Hate to break it to you, but that’s what being married is - commitment to your family. Family isn’t a joint partnership with independent partners.
  • Accountability. My wife and I are accountable to each other for our finances. If we agree to a certain spending pattern, we make sure we stick to it. Having family money separate would destroy any type of accountability we have - I’d have to be accountable to myself only. That’s what makes joint accounts great - sense of accountability for your family finances.

 What is the downside of combined finances?


Basically, after living with my wife for almost seven years, I can honestly say there’s only one downside - buying presents for each other. If few days before her birthday she looks at our online budget on her phone or computer, she might see something that will give away the nature of the gift I’m buying - and same for me. Simple solution? We just tell each other before we buy any presents and promise not to check accounts online prior to gift giving. Easy as that.

So, call me old-fashioned (even though I’m in my 30’s), but I don’t believe in keeping family money separate. From family dynamics, from financial perspective - it makes sense. Combine it all, what’s yours is mine, and what’s mine is yours - there’s no other way in my opinion. I mean, there are - but they don’t make sense to me.

I’m The Financial Underdog, and I like clarity and simplicity.

  • JR

    There are huge downsides to a joint account. They may appear if one part of the couple makes is less disciplined and does not respect the agreed budget. Then things can go south regularly. In the long run it creates tension. So common account will work but both people must be as proficient and disciplined with money. If that’s not the case: watch out. I’m talking out of experience.

    • Financial Underdog

      JR, I see where you’re coming from, but I tend to disagree (and I’m speaking from experience too).

      If a couple is having troubles working together on their financials, they have to work it out. Splitting money and using separate accounts won’t solve the problem; only working on this problem, may be even some counseling will solve this problem. You have to go after the root of the problem, not treat the symptoms.

      Sure, splitting accounts will make it hard for one person to overspend and might limit the damage. But what is the end game here? You can’t do it forever and ever. Attacking the problem and working as a team to solve it will fix the problem once and for all. It might be hard - but it’s well worth it instead of using band-aid solution like separate accounts.

      I hope this makes sense.

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