When you’re married, joint finances can encourage you to think as a financial team and work together toward common goals. But there’s a case to be made for keeping separate accounts, too. Having a separate account gives you leeway to spend and save as you like. It can also be a critical source of security if things go wrong. Even if you and your spouse share bills and bank jointly, it may make good financial sense to maintain separate accounts.
Why you may want a separate account
Your reasons could be as simple as wanting to maintain a bit of financial independence or as complicated as needing a financial lifeline to escape abuse. Let’s start on the simple end of things: having individual accounts in addition to a joint account gives you and your spouse financial autonomy. You don’t have to check with your partner before buying lunch or a pair of shoes. You can manage your own spending without worrying you’ll accidentally overdraw your joint account or save and give yourself a little extra financial security. You can – and should – still give priority to maintaining joint finances and building toward financial goals together. But you’ll have a mechanism to help you handle individual spending and saving cleanly. The story is different if you and your spouse aren’t open and transparent around finances. Consider a separate account if you’re in any of the following circumstances:
|You don’t have open access to joint funds||You can’t check your balance or review statements. You aren’t able to withdraw money freely. You don’t know where you’re spending joint funds or how your finances work.|
|You’re afraid your spouse will drain your joint account||You may be worried your spouse has a gambling addiction, spends irresponsibly or makes bad investments. Do you suspect an extramarital affair or criminal activity? Are they planning to leave – and take all of your joint money with them?|
|You’re being financially abused||Financial abuse takes many forms, including stealing your paycheck or pension money, putting you on a strict allowance, using your credit to run up debt and interfering with your ability to hold a job. Abusers set things up so you’re financially dependent and unable to leave. If you suspect you’re being financially abused, the Allstate Foundation offers a free curriculum for surviving financial abuse.|
|You need to escape domestic violence||Financial abuse may go hand in hand with other types of abuse. If you and your children are at risk, planning for a safe exit may save your lives. For information and help, contact the National Network to End Domestic Violence’s National Domestic Violence Hotline: 800.799.7233 (or TTY 800.787.3224).|
Should you tell your spouse?
For your safety, if you’re experiencing financial abuse, domestic violence or other issues that cause concern, open a separate account without telling your spouse and take steps to make sure your account isn’t discovered. Transparency and collaboration are clearly the better choice if you’re in a healthy marriage and can be open about finances with your spouse. But if you have any reason to be worried for your physical or financial safety, you’re safer being discreet.
Where to keep your separate account
You can open an individual account at any bank or credit union. Choose an account that best suits your purposes:
|Checking||A checking account gives you the most flexibility. You can make purchases, pay bills and use your account to build up a balance. Shop around for an account that’s free of monthly maintenance fees. You may even find one that pays interest.|
|Savings||Choose a savings account if your primary goal is stashing away money for a large purchase or a rainy day. A high-yield savings account may be worthwhile if you have a large balance or a plan to keep funds in your account for the long term.|
If it’s important to keep your account hidden, consider using an online bank or credit union that doesn’t send paper statements (or choose paperless banking at a regular bank or credit union). Here are a few additional options:
- An online payment account, such as Paypal or Venmo, may function much like a bank account, allowing you to accumulate a balance and make purchases or pay friends. Customers and clients can also pay you.
- A reloadable prepaid card lets you store funds and pay for things as you would with any card.
- A safe place to store cash, whether it’s a friend’s house or a safe deposit box at a bank, may not pay you interest or provide a safe way to pay for things online, but it can be a way to keep your money secret and secure if necessary.
Keep your account safe. Set up multifactor authentication and transaction alerts on your checking or savings account. Find a secure place to keep account information, debit cards, safe deposit box keys and any relevant information.
How to fund your separate account
Couples who openly set up their finances with both joint and individual accounts have three simple options for funding:
- Receive direct deposits to your joint account and transfer funds to your individual accounts each month (or every paycheck).
- Receive direct deposits to your individual accounts, then transfer funds to your joint account accordingly.
- Have direct deposits split between your joint and individual accounts. Your payroll or human resources department should be able to help you with this.
Funding an account without your spouse’s knowledge
If you need to fund an account without tipping off your spouse, look for any opportunity to direct funds into your individual account.
- Deposit any money you receive as a gift or inheritance into your individual account.
- When you pay for groceries with your joint debit card, get cash back and save it.
- Pull spending money from your joint account out in cash and deposit leftover funds into your individual account.
- Have a portion of your paycheck direct-deposited into your account, especially if you get a raise or bonus, or work additional hours, and won’t have to account for a change in your paycheck amount.
The bottom line
For couples building a financial life together, separate accounts can make managing joint finances more focused, with a clear list of items that are paid jointly and designated contributions that cover monthly and long-term costs consistently. After that, what happens in your individual account stays in your individual account. If you’re struggling with financial abuse or domestic violence or other potential problems, establishing an individual bank account can bring peace of mind and a firm first step toward independence. In either case, you may also benefit from reviewing your individual credit report. For couples, looking at debts, credit problems like late payments or accounts sent to collections, and signs of identity theft can provide a clear picture of collective financial health. For an individual, a credit report may show signs that a spouse is running up joint debt, failing to pay joint credit card or loan bills, or using their identity to open accounts.