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As a CPA and spouse, Booth dives into the dynamics involved in using joint checking accounts, offering a perspective on having both a joint account and personal accounts for each spouse.
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Find more educational material and lifestyle tips on boothparker.com!
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What is MOM-enomics with Booth Parker, CPA?
Real moms. Real mom financial issues. Real moms in business. Real stories. I am Booth Parker. A CPA, wife, and mom that loves all things home and family. In this podcast, I talk all things money for moms, families, and small business. From tips to ideas to info you just need to know, I break it down so moms can apply it to their own families and businesses!
[00:00:00]
Introduction to Joint Checking Accounts
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Today we are going to talk about joint checking accounts between husband and wife. So I was on social media recently and there was another financial person I follow, and he was very, very adamant that when a couple gets married, they should take all of their accounts, combine everything, and only have one joint checking account. And I have a different opinion on, on that process. And so I am going to talk about why I believe what I do, today.
So while I do agree that when a couple gets married that they should have a joint account and they [00:01:00] do need to be on the same page with how they're going to handle their money, how they budget, what they prioritize for spending, what their savings goals are, all of those kind of things, they do need to be on the same page and generally the budget that they used for their general household expenses can be through a joint account.
So when you're married, it's not like the two of you are just roommates where you have everything in separate accounts and things like that. Legally, you basically become one, and so a joint account makes sense.
The Importance of Individual Accounts in Marriage
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But I still believe that while you have a joint account, each spouse should have some type of personal checking account or savings account.
So my perspective may be a little different because I'm a woman. But I personally feel that every woman [00:02:00] in a marriage should have . Some kind of personal checking account with some money of her own. You go into a marriage with the best of intentions and positive that everything's gonna work out, and it's really gonna be a fairytale and live happily ever after.
But unfortunately, that is not always reality.
Financial Control in Abusive Relationships
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Now, while I have never, um, had to deal with, uh, domestic violence or abuse or anything of that nature, I have friends and, you know, childhood friends, present day friends, um, and you hear lots and lots of horror stories of women having to deal with domestic abuse.
And yes, the abuse can go the other way. Sometimes the, the man is, is the victim of the abuse, but generally it is, it is the woman. And a lot of women end up staying because they don't feel like they can leave. And almost all of those times it is because they don't have a way to leave financially [00:03:00] and that keeps them tied into the domestic home because they cannot escape it.
So I personally have a childhood friend who I even attended her wedding, and you definitely would've thought it would've been a happily ever after. Had you attended the wedding, uh, and this was decades ago. Fell out of touch with her, but learned, I think it was in the last year or so. They had moved far away from any family or former friends, and the husband was very abusive behind closed doors. and one very common form of of abuse is financial control. And her spouse had done that. Everything was in a joint account. Um, she had while she had access to it, she couldn't go, like, withdrawal and try to escape, um, without him seeing it and, and getting to her. So she stayed in a very, very bad situation for a very long time.
Years and years and years because she [00:04:00] could not financially escape. And I know a lot of people who have not been in the situation or anything like that just say, oh, we should just leave this, that, and the other. But it's definitely harder than that, especially with children involved. pretty much impossible to go anywhere these days without a dollar to spend if you're trying to flee someone and truly get away quickly. So the financial control in a abusive relationship is very real. And I think that a woman, both spouses actually, but should have, um, access to some kind of personal account that has some money in it.
So I know that that example was a little bit of a Debbie Downer kind of moment, but it is, um, often reality. Very, very sadly and definitely just want to know you have some kind of backup emergency plan. So that is my thoughts for. The, the worst case scenario reason of [00:05:00] why a married couple should have a joint account for all their, you know, general expenses, but each have, uh, a separate checking account for, um, any kind of emergency that may come up for them individually.
Likewise.
Personal Approach to Managing Finances in Marriage
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Um, my husband and I, when we got married, we came into the marriage. We each had individual checking accounts that our paychecks went into, all of those kind of things. When we got married, we opened up a joint checking account. The two individual checking accounts that we came into the marriage with in 2004, we still have today.
So we kept those, created a joint account. And this is the way I like to do it, because yes, you need to be on the same page with your spouse as far as spending and all of that kind of stuff goes. And that's what the joint account is for. So you sit down together, you do your budget, all of that, and you look and you put that money [00:06:00] into the joint account.
The Role of Discretionary Spending
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So one of the things you do when you do your budget is you decide how much of your income you're going to use as discretionary spending. So that is. Things that are definitely wants and not needs. So for instance, if you sat down and did your monthly budget and you decide that $500 is your discretionary spending for the month, then we would've each put 250 into our personal checking accounts and let ourselves have our discretionary spending how we want it.
So if I wanted a pair of shoes, I could buy a pair of shoes. If he wanted to go play a round of golf and have a beer with his friends. He could do that as well. And it also was nice not to every time I logged into online banking, maybe see what he had purchased me for Christmas or my birthday. So surprises are always nice too.
So in that regard, it was nice to have the freedom, the independence of a, of a, my own checking account. Meanwhile, our [00:07:00] household and our, our budget for our family and our home was completely covered through the joint account.
Handling Finances in Single Income Marriages
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Now there's also the, um, possibility that it's not a dual income marriage. Right? So sometimes, um, usually the mom would be the one that would end up staying home. But I know lots of stay-at-home dads these days too, and that's really cool. Uh, so if you have a situation where there's only one income for the family and that is going into the joint account to pay the household bills.
Still treat it the same with that discretionary piece and a little money going into the individual checking accounts. Even though you're married, you still have your own kind of personality and wants, and it's nice to have that little bit of autonomy that you can kind of do what you want with that money. So it's not the whole family budget, it's just that little bit of discretionary money. And then you also have a little backup money in there that you maybe came into [00:08:00] the marriage with. So if your personal checking account had.
$5,000 when you came into the marriage. Then y'all decided to start putting, uh, money into a joint after that, you know, so you could put that money in a high yield savings. It's still there if you need it for an emergency, and it, it sounds . Sounds kind of pessimistic to be worrying about this emergency, but if you're, if you're in that situation, if you know someone who's been in that situation that can't escape an abusive marriage because they can't financially get out, then you would understand why it's a good idea to have these separate accounts with some money in them.
For the discretionary as well as a little backup in case of an emergency situation.
Advice for Young Couples
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So I like to advise, you know, younger people who are starting to get engaged and things like that. This is my advice to them, and it's not [00:09:00] what everybody wants to do. You know, some couples still keep completely separate and they decide who pays what.
I don't always think that's the best idea because it kind of lends to not being on the same page and one thinking that maybe if they make more money, that they're more valuable to the relationship and things like that. And I'm, I'm not of that thought process, but I do like the thought process of a little bit of autonomy, but being on the same page with the budget, the spending amounts, the savings, all of those kind of things.
Conclusion: Balancing Joint and Individual Accounts
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So while I definitely think that a married couple needs a joint checking account, I also think each spouse still needs their own individual accounts. And you can still have a very successful marriage as long as you're on the same page with everything in the spending, even if everything is not all in one joint account.
[00:10:00]