Personal finance is just that -- personal. When you're single, you, yourself, and you have complete control over your bank account. Only you know how much you spend on your secret Russian nesting doll collection. But then you find a special someone to take down the aisle. You'll share your life with that person, but will you share your finances?
Well, that's a complicated question, since "finances" could refer to any number of areas, from your mortgage to your debt. But one of the most basic and fundamental financial decisions that married couples make is whether to share a bank account. There are compelling arguments on either end of the spectrum for and against joint banking. And ultimately, it's a personal decision between you, your spouse and Dr. Phil. And Dr. Phil's gonna tell you to keep your accounts separate. But my husband and I did just the opposite. Soon after we said "I do," we said goodbye to our individual checking accounts. Not only have we never regretted it, but we think joint banking has actually brought us closer together.
Money flies in and out of our bank account faster than our baby crawls away during a diaper change. But tracking exactly how much we're spending and saving is fairly easy when we're using a central account for most of our transactions. We each have a few individual credit cards, but we pay them off with our joint account. It ensures we're always both aware of where our money is coming from and going to because we have a shared account that we both see.
One Financial Mindset
Opening our joint checking account and closing our separate accounts immediately changed the way we look at our finances. The money was no longer mine or his -- it was ours, literally and figuratively. And we still think about it that way. We don't bring home identical paychecks, but we both stick to identical budgets. We've budgeted out personal spending for ourselves, but we each get the same amount. And our financial goals are the same, too. It's easy for us to stay on the same financial path and stick to our financial goals when neither of us has ownership over a certain percentage of our money.
Because all of our spending is aired out for the other person to see, we don't keep any financial secrets. We know what the other person spends, and on what. While this may sound a bit stifling, it keeps both of us from creating unhealthy spending habits. And more importantly, it keeps an open line of communication about our spending. Of course, all bets are off around birthdays and Christmas. (We have a "no peeking at the bank account" rule to keep from spoiling any surprises.) We even let loose every once in a while. Can you tell how wild and crazy we are? Kidding.
%VIRTUAL-article-sponsoredlinks%Of course, there are other considerations. We married young, and the only financial baggage we brought into our marriage was my student loan debt (which became a joint effort to pay off). If we'd been older and more settled, the decision to share our finances would have been a more significant one. But as the saying goes, "The couple that banks together stays together." Or maybe I just made that up. While joint banking isn't for every marriage, it works for us. And maybe it's the financial recipe for you, too.
Joanna and Johnny are the writing duo behind OurFreakingBudget.com, a personal finance blog documenting the joys, pains and realities of living on a budget.
Is a Joint Bank Account the Secret to a Happy Marriage?
Interest rates are low, but that's no excuse to accept 0.01 percent interest rates on your savings. Just a little shopping can find you many FDIC-insured savings accounts paying as much as 1 percent in interest, usually with no fees and easy availability to your money through electronic funds transfers. Compared to the near-zero rates that uninsured money-market mutual funds and other alternatives pay, high-interest savings accounts are a much safer way to save.
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Too many people never update their insurance coverage to deal with changes in their coverage needs, whether it comes from changes in family status for life insurance, health conditions for health-care or long-term care insurance, or even what types of property you own for homeowners' insurance. Don't wait for disaster to strike; check with your insurer or agent to see if your current coverage meets your needs.
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Resolving to be more financially astute and to avoid common mistakes will help you get your finances in order more quickly. These tips should give you more money to help you meet all your financial goals.