The Complications and Benefits of Sharing a Bank Account

Should married couples merge their finances?

Sean Kernan YAHOO CREATOR  Updated June 18, 2024

Brian’s complaining went from a weekly affair, to a daily nuisance. We convened in a shared office gym each day. He was a well spoken and well paid engineer in his late 30s, and was having incrementally larger arguments with his wife over money.

It made no sense on paper. Both of them made more than $100K per year and lived in a low-cost area of Florida. Money should have been the last of their concerns. Yet every day in the gym, he’d groan, “She is constantly questioning every purchase.” Or, “I can’t even spend my own money without a fight.”

They’d succumbed to lifestyle inflation, which occurs when your spending rises alongside your income. They’d wracked up debt buying a bigger house and fancier cars. They’d also put their kids in a slightly-nicer private school that cost twice as much, which created resentment on Brian’s side.

And, as they’d added these costs, they’d also combined bank accounts. Because I was working as a budget manager for our company, and perhaps because we were friends, he thought I could help him navigate this domestic maze. But Brian’s problems appeared much deeper than just money. Sadly, he and his wife split just one year later.

Unsurprisingly, money and finances are a key factor in many divorces. Even with the best of intentions, a shared bank account can unleash a wave of problems that are hard to resolve. Yet combining accounts can be quite beneficial. So how do we navigate this predicament?

The give and take

In the 1970s and 80s, keeping separate accounts was seen as bad luck for a marriage. This legacy belief is less present today, but still harbors itself in more traditional circles. A study by Bank of America found that couples share accounts less and less in recent years. Young people are marrying later, after they’ve better established their careers. Additionally, in prior decades, women worked less and depended on husbands and needed account access.

Research shows that couples who share finances are happier — but, and it is a big but — it’s hard for researchers to know if they’re happier because they share an account, or if they share an account because they were already happy. The cited perk is that sharing promotes an “us” dynamic, a sense of unity that also promotes transparency.

I asked several married friends about their financial arrangement and each had surprisingly strong opinions. One looked at me incredulously and said, “People still share bank accounts? That is such a bad idea.” Another came in hot from the other side, saying, “We share an account. That’s pretty much how every marriage goes.” He was insistent, even though data shows that only 52–65% of couples in western nations use a joint-account.

An older female friend said that when she shared an account, her husband ran off and spent on things they never agreed to. When they separated, he effectively cleaned out her half, which left her in a financial pit. It took her years and a lawsuit to get her money back.

One option is a hybrid approach, where you have a shared expense account and separate personal accounts. This way you are tapping into the benefits of feeling like a team, while keeping yourself protected.

To read more:  https://www.yahoo.com/lifestyle/story/the-complications-and-benefits-of-sharing-a-bank-account-204402760.html