When couples fight about money: Shared finances or separate accounts?

Most couples fight about one of three things; money, sex, or kids. If money is causing strife in your married life, it could make sense to part with shared accounts and manage finances separately. Most couples have their own closets, their own dresser drawers and even sleep on their own side of the bed so what’s the problem if a couple wants to have their own accounts?  If each spouse is covered by a company sponsored retirement account such as a 401k, they already have some of their assets separated.

Each person in a relationship is still an individual and has their own priorities. Those priorities can be identified by what they spend their time doing and where they spend their money. No two people are the same, and men and women in particular are very different. They’ll never agree 100% of the time on how and where their money should be spent, and that can lead to problems when finances are commingled.

If your spouse is making a fuss over how much you’re spending on clothes yet your spouse is driving a nicer car than the one you are driving, keeping some or all of your money separate can help to reduce the conflict and resentment than can result from different spending priorities.

Think of it this way: The husband might like the color blue but the wife might like yellow. One color isn’t more important or valid than the other. It’s just a personal preference. For example, having new clothes or going out to eat might be more important to one spouse where the other might like decorating the house more and having a newer car. If shared finances are causing stress in your life you might want to try separate accounts. To make the transition, keep the following points in mind. Each spouse must:

1. Spend less money than they bring home.
2. Allocate for mandatory expenditures (mortgage, utilities, groceries, savings, etc.) in an equitable way. Keep in mind that will mean different things to different people.
3. Withhold judgment about where your spouse is spending their discretionary funds. He might be thinking, “You bought another pair of shoes?” and she might be thinking, “You spent how much on that new putter?” As long as these purchases are within each person’s spending plan the spouses should not give voice to their judgments.
4. Avoid considering available balances on credit cards as spending money.

If one spouse isn’t as fiscally responsible, separate accounts could potentially lead to financial crisis. If you’re worried that your spouse won’t hold up their end of the bargain, here are some ideas for ensuring that the necessary expenditures are covered while still giving your spouse some financial freedom:

1. Have one joint account for mandatory expenditures, into which both spouses contribute a predetermined amount (see #2 above).
2. Budget an allowance for each spouse and deposit this allowance into separate accounts each month to be spent as each sees fit (see #3 above).
3. Trust but verify (see #4 above). Check your credit reports at least once every six months. In this era of identity theft, you should be doing this already.

How do you and your partner handle your finances and differing priorities? Do you have joint or separate accounts?

Steve Repak

Steve Repak, CFP®, the author of Dollars & Uncommon Sense: Basic Training for Your Money is an Army veteran, transformational speaker and consultant. Steve was selected the 1995 Fort Bliss, Texas Non Commissioned Officer of the Year and graduated Summa Cum Laude with a Bachelor of Science in Management Communications from Amridge University. He now works for himself as a successful Certified Financial Planner™ in Charlotte, North Carolina, where he lives with his wife and three children. Steve has been a guest on Fox and Friends, 700 Club, Fox Business & Bloomberg Radio. Steve has been featured in BusinessWeek, Forbes, Yahoo Finance, and Investor’s Business Daily. For more information about Steve and his book you can visit DollarsAndUncommonSense.com

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