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Just Married: Maintain Separate Accounts?

Just Married: Maintain Separate Accounts?

[singlepic=34,560,560,,center]Photo by chiseled marble

I know somebody who is getting a divorce. I’m sure you do as well, but this person’s financial situation is somewhat unusual in that there are a lot of marital assets, and the spouse has used real estate and arrangements with his/her employer to hide additional assets from the eyes of divorce attorneys. This is a pretty common tactic for people who have a lot of assets and any experience with divorce, and since I’m not a party to this marriage I don’t know how this was arranged without both spouses knowing. I don’t know if it was 100% deceit on the part of the spouse who hid the money, or if the other spouse’s ignorance of all of the money concerns helped the deceit along. As is the case with most things, the truth is probably somewhere in the middle, not that this excuses criminal behavior against your spouse. But it brings up some interesting issues regarding marriage and money that I thought I’d discuss today.

Before I got married, I was advised by more than one person to maintain a separate savings account for myself. Though it was never made explicit, the assumption was that this separate account would contain money that was “mine” and “mine only,” and my husband (then fiancé) would not know about it or have access to the account. It would be, in effect, an emergency fund for me if there was some reason I needed to escape the marriage for any reason.

Though this advice was given with the best of intentions, by people who had experiences that made them believe it was a necessity, I ignored the advice for several reasons. First, because my husband and I completely merged our finances before we got married, and hashed out a household budget that accounted for both of our incomes and expenses, long before we were legally expected to do so. It was my contention then (and still is) that an essential part of getting married is the merging of two lives, and if that union excludes finances, then it cannot be said to be a wholehearted union, since you are holding something back. I don’t really believe that you can say you are in it for the long haul, when you feel like there is something you cannot share.

This is a pretty conservative, red-state stance for somebody like me to take. Particularly when you consider that both of my parents are divorce attorneys. But I have always wondered how much the divorce rate might be affected by these kinds of arrangements–I really believe that each couple should be allowed to decide what their marriage is going to be for themselves, but on the other hand, if we don’t give ourselves fully to a commitment, is it likely it’s going to stick? I don’t know.

The separate account argument takes various forms. Sometimes it involves a pre-nup that states that assets remain separate in the event of a divorce in order to protect children from previous marriages. Sometimes, it is his-and-her accounts, with some kind of arrangement for splitting the bills based on percentages and relative incomes. Sometimes, it is just a private account with money stashed away “just in case” something happens, which in my mind is both the most problematic of forms and the most interesting. Because it shouldn’t be ignored that there are those occasions where an abused spouse has found themselves financially trapped in a marriage, with no way out, and a separate account in those cases might be the thing that allows them to escape.

In short, I find my views on commitment, feminism, and the realities of marriage in the post-modern era are at odds on this issue.

But here is how I handle the quandary of money in my own marriage. I am the one who manages the finances in our house, and Mr. Right-Click reads the budget each month so that he knows where everything is going. We both have names on and logins to all of our accounts, checking, savings, retirement, etc. We regularly check in with each other regarding expenses and balances. It would therefore be impossible for either of us to find ourselves in the situation that housewives (in particular) from an earlier era might have, viz. where they have no access to or authority with the household money and are completely dependent upon the other spouse for financial support. Of course, these things are always affected by the particularities of the marriage at hand. When there is family money coming into a marriage, the laws are different regarding what happens in a divorce. If there is a huge disparity in incomes, this also might come into play as far as how the money is handled. But I think that a smart person in a marriage–whether happy or otherwise–always avails themselves of information about the couple’s money. This system works well for us, and it is what I would recommend to people who are getting married. What works for you?

Comments (7)

  1. May 12, 2009

    We have a joint checking and joint savings that make up the bulk of our money. We each have separate checking accounts that are for the “allowance,” which is a small amount we get each month for discretionary spending, clothes, shoes, etc. However, we both have the passwords to each other’s individual accounts, and the records are in our shared office, and we frequently talk about how much we have, what we bought, how much it cost, etc.

    I cannot imagine having a secret fund, for the same reasons you outline. I can see why women felt the need 100 years ago, but thankfully, we don’t need that anymore (or at least I don’t).

    We’ve had one argument about money in nearly nine years of marriage. Our system has worked very well for us.

  2. May 12, 2009

    I have a friend who is in a troubled marriage and it has been the lack of financial control that has really screwed things up for her (and messed with her credit). I think it would be really scary to be married to someone who is not letting you in on what’s going on financially. This guy’s a total megalomaniac and doesn’t think his wife should have a say on anything since she’s not a huge financial provider for them. In my relationship I am the money handler as well – and we both have full access to everything. I love being on the same page. I think you’re right about the whole-hearted union thing.

  3. May 12, 2009

    Like Kerry, we have joint checking/savings for most of our money. However, we both maintain separate accounts as well that we use for paying off individual debts & for discretionary spending. We have frequent discussions about assets & debts, so don’t feel that either of us is in the dark about anything. BUT, as in your situtation, a friend of mine is getting divorced & found out that her soon-to-be-ex has a lot more assets than she was previously aware of, and is now wishing that she’d been more pro-active in the budget management.

    I don’t think that NOT merging accounts means that you aren’t committed to a marriage, though. Honesty is the key, however finances are managed, right?

  4. May 12, 2009

    @Amy, yes, as always, the key is honesty. If you know about all the accounts, then that’s all that really matters. I just wonder about these cases where one spouse handles the money and the other just is totally ignorant of everything money-related. It seems like a recipe for disaster.

  5. May 13, 2009

    I am part of one of those couples you caution against: I handle the finances, and for the most part my husband is clueless. I am always happy to tell him what’s up, and he knows where the bank statements are kept, but the day-to-day? Clueless.

    We have talked about this extensively – for the most part, bills stress him out. So I handle them. I have account information for everything locked away in two separate locations so that, in the event of my death, he would be able to immediately have a handle on what goes out and when, as well as all our accounts/passwords. I agree that it’s a potential disaster, but given the way he feels about it I’m basically okay with this arrangement.

    We will have all our debt (other than 1 car and mortgage) paid off at the end of 2009, and I know that then he’ll be more receptive to seeing what’s coming in/going out, but until then I know the massive amounts of money we’re paying toward our stupid early-marriage consumer debt just stress him out completely. I’m okay with shouldering that burden.

  6. Stephanie
    Feb 25, 2010

    I don’t usually comment on blogs, but I actually read this (lol) and this exactly what me and my husband do. We’ve been married for a year and a half now, all the money is both of ours, I do the budgeting in our family and we go over it together and make adjustments so we both are happy with it and know where everything is. It works for us, and i think if we were to have seperate accounts there would be more fighting and less trust.

  7. May 31, 2010

    We have been married for just under a year now. Before I met my husband, I was a strong believer that a woman should have her own money. Not necessarily a secret stash, but her own checking/savings account. That belief stemmed from insecurity, trust issues and a need for financial stability that I felt I couldn’t trust a man to provide/maintain.
    My husband knew about my insecurities and left the decision up to me. “What’s mine is yours, but if you need to keep something of your own, I understand.” Since we’ve married, we have merged almost all our accounts – checkings, savings, credit cards.
    We are both aware of each others assets, income and expenses. We talk about all our expenses – even let each other know of a haircut expense coming up. We pay all our bills together on the 1st of every month, right after we move money into our joint savings account.
    I think different things work for different people, but this arrangement works for us because we don’t see ourselves are 2 different people. Those trust issues? No longer there. And I couldn’t imagine being married to someone where I had to hold something back.

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