By Christi Posner
If you and your spouse fight over money, the way you organize bank accounts may be to blame.
Should You Manage Money With a Joint Account or Not?
These three important steps can help end financial feuds.
Do you manage your money through one joint bank account? Do you keep your money in separate bank accounts and manage certain bills on your own?
If you haven’t followed these 3 important steps before choosing how to manage your bank accounts, this may explain your financial feuds.
Understand Options to Organize Bank Accounts
When deciding how to set up your bank accounts with your partner, consider your options. You can either set up a joint bank account or have separate accounts. You can also do a combination of both. See each option in the table below.
Pros and Cons on How to Organize Money with Joint and Separate Bank Accounts
Joint Bank Account Tips
- Deposit all household income into this account, and start organizing bills to come out of this account.
- Transfer savings to joint savings accounts.
- Set spending limits and discuss how you will track your money.
Separate Bank Account Tips
- Identify who will be managing specific bills, savings, and variable expenses.
- One person’s expenses should never outweigh their income.
- Deposit income into the separate accounts, and ensure appropriate expenses come out of the appropriate accounts.
- Delegate who is responsible for saving, and what variable expenses each person is responsible for buying.
Tips for a Balanced Approach
- Create one joint bank account to pay all of the bills.
- Set up joint savings accounts to save for goals together.
- Allocate separate spending money, either cash or separate bank accounts.
Create a Balanced Budget Before Setting Up Bank Accounts
Whether you choose to divide finances or join them, managing your money works best when you go through a budget planning process first. Before deciding how to set up your bank accounts, follow these steps:
- Create a Household Budget - Write down the take home income for both partners in a month and subtract expenses for the entire household for the month.
- Track Your Spending - Don’t know how much each person spends? Get accurate figures and edit your budget accordingly.
- Review Your Options to Create a Balanced Budget - If your total expenses cost more than the total income you bring in every month, consider your options to balance the budget.
- Now you're ready to re-organize your bank accounts!
Re-Organize Your Bank Accounts to Manage Money Effectively
Once you have a realistic household spending plan, decide how you would like to use bank accounts to make budgeting easier for you and your spouse. Based on the pros and cons listed above, have a conversation and decide which way will work best for both of you.
Use Organized Bank Accounts to End Money Fights - Money Management Tips for Couples
Now that you have some tips on money management and how to organize your bank accounts, you are better equipped for ending money fights with your spouse. Finances are the leading cause of divorce so finding a way to organize your bank accounts better can help you avoid money fights with your spouse or partner.
According to a recent study, partners often blame each other for problems with personal finances. 36% of women accuse their partners of overspending, while only 25% think that their money issues are their own fault. On the other hand, 37% of men accuse their partner for money troubles, and only 23% admit fault.
By first joining forces to create a balanced household budget, and then deciding how to manage bank accounts, you may be able to avoid becoming another statistic.
Let's hear it from you - do you prefer having joint accounts, separate accounts, or a little of both? Leave a comment here or ask us a question about organized bank accounts on Facebook. If you and your partner would like help creating a budget or would like to get help with debt, find a reputable, non-profit credit counselling organization in your area.
- 4 Reasons Why Couples Argue about Money
- How To Talk to your Spouse about Setting Financial Goals
- Learn more about how you and your partner can communicate better about your personal finances. Join us for a free Couples & Money webinar.