The Pros and Cons of Having Separate Bank Accounts

Mina and Jason Burbridge have been married for two years. She’s 47. He’s 48, and they’ve always maintained separate bank accounts. It gives the Boston couple some freedom to act unilaterally. As Mina says, “If he wants to buy something that’s dumb, he can do it. And so can I.”

They also set up a joint account early on in order to pay for big household expenses, although another motivation came right before their October 2015 wedding. Mina’s account was hacked into and had to be frozen for two weeks as the situation was rectified. The incident made them realize the benefit of two things: spreading their money around and having some always be mutually accessible, she says.

But the separate accounts have continued to show their worth. Mina is a psychologist and clinical trainer. Jason works from home, building a business buying and selling baseball cards. It’s all online, much it on eBay, and having distinct accounts provides another layer of protection, as he could be doing 20 transactions a day, Jason says.

Mina and Jason’s arrangement is not as atypical as it may seem. A Bank of America study found that Millennial couples have separate bank accounts more than twice as much as Generation X and Baby Boomers. At first glance, it could be seen as affirming their independence and pushing back against the idea that marriage has changed much in their lives. But it’s more than that, says Dr. Robyn Landow, a psychologist in New York City.

Millennials are waiting to tie the knot. A Gallup poll showed that 27 percent of Millennials are married versus 36 percent of Gen Xers and 48 percent of Boomers at comparable ages. Couples often live together for longer and have separate accounts, and, when they do marry, they don’t change the setup. It’s part inertia, part lack of urgency, part, “If it ain’t broke,” Landow says.

Still, while said couples may not see a need, having a joint account carries symbolic and concrete weight. It’s an awareness that there’s now an “ours”, which one day might involve expenses for houses, children and extended family. There’s the above-mentioned minimizing risk and making money available for a worst-case scenario. And on a more granular level, a check made out to both people – gift, joint tax return refund – is an easier deposit if both names are on the account, says Brian Haney, a financial adviser in Silver Spring, Maryland.

But the type of account in and of itself doesn’t predict or guarantee marital success or failure. Trust, commitment, and love are still the must-haves, says Landow, adding “The truth is if someone wants to hide or withhold money, with enough planning, they could do it.”

Whatever the system, couples first need to understand each other’s financial type. It involves figuring out whether a person believes in enjoying life as it comes, or in being a hardcore saver, always wanting something in the bank in case of emergencies, which Haney says, are not theoretical occurrences but realities. When attitudes are talked about, decisions become less arbitrary. “It makes it easier to know where you’re coming from and easier to find common ground,” he says.

And if all that’s in place, responsible people can make individual accounts work – it just becomes a matter of assigning out the bills. But the setup loses the macro perspective of building something together. “You’re not roommates,” Haney says. In other words? Being married means sharing all parts of life – one house, one bed – and money is another component.

The joint account takes down barriers, because, especially when using a budgeting tool such as Mint, a couple can see all money coming in and going out. The information may be uncomfortable, but with everything out in the open, problems can be reconciled, plans can be tweaked, and spouses can make more informed decisions based on what they want.

“It reinforces stability in your relationship,” Haney says. “You’re a team, and when you keep things separate, it’s harder to be a team.”

That doesn’t mean individuals accounts don’t have a place, whether it’s for surprise gifts, the occasional indulgence, or something else. They just need to be another joint decision in what they’re going to look like and be used for. And to help get to the decision, Haney says to merely look at the monthly budget. The numbers will provide the answer to what’s needed for shared expenses, and then how much partners can donate to themselves. The approach is more detached, less emotional. “It takes the feelings out,” he says. The big thing is that it’s discussed and transparent to prevent suspicion, surprises, and distrust.

“If you know it, you may not like it, but you can deal with it,” Haney says. “But if you don’t know, you automatically don’t like it. The unknown is always uncomfortable. It’s never comfortable.”