Why Young Married Couples are Keeping Separate Bank Accounts

"Separate bank accounts can be a powerful tool for young married couples seeking financial independence and autonomy in their relationship. However, it's important to remember that open communication and trust are essential for successfully navigating this approach." - Rachel Cruze

Handling personal finances is one of the first challenges a married couple faces. Earlier, it was assumed that when two people got married, they would start managing their finances through a joint bank account. This was even seen as a symbolic gesture of trust, and commitment. A joint bank account has, traditionally, been a sign of commitment. As newlyweds start their lives together, it is perhaps the clearest way for them to say, to each other and the world, “What’s mine is yours, and what’s yours is mine.”

But as we progress into the 21st century, financial decisions like these are being seen differently. These days, some young couples are skeptical. There has been a generational change in the new generation, recent research shows that, cross-culturally, more people are keeping money separate. This trend is particularly pronounced among low-income couples, who are likelier to value access to their earnings over the show of commitment and loyalty that comes with the decision to merge finances, a quality often prioritized by higher-earners.

Some of this has to do with Millennial marriage trends more generally. Compared to previous generations, Millennials get married later in life, and thus significantly more of them live together before marriage. Because cohabiting couples are far more likely than married couples to keep finances separate, certain inertia develops. When today’s young adults do decide to get married, many of them are further along in their careers, with a better sense of who they are and what they contribute to their workplace. One 29-year-old Raman, I talked to, a medical resident in South Mumbai, told me that for those who believe one’s bank account offers a clear reflection of a person’s work ethic or success, it can be hard to cede control. “It’s about wanting to maintain one’s sense of identity, individuality, and autonomy”.

When it comes to owning a joint bank account with one’s spouse, people have even started questioning the practice and wondering if it’s still necessary. Let us help you figure out the answer; read on to learn about the pros and cons of having a joint bank account:

The pros:

• Couples usually draw up a plan to split all the bills, mortgage payments, and other expenses related to their homes. A joint bank account works wonders in this case, as you don’t have to pool in more money or figure who pays which bill. With just one account, all your payments can be taken care of while ensuring both partners contribute towards these expenses.

• If ever something unfortunate happens to your spouse and they die, you don’t have to worry about gaining access to funds saved by them. Since you both have a joint account, you have equal privileges when it comes to accessing the account.

• This is especially a blessing for a woman who doesn't have her source of income and is dependent on her partner. Had you not owned a joint account, you'd be locked out of the account till all the necessary paperwork is completed.

• Keeping track of expenses gets too hectic too fast. If you and your partner have a joint account, both of you can easily assess your expenses. This makes it much easier to figure if you’re overspending and if you need to cut down.

• If you or your partner has a spending problem, a joint account will benefit both of you. The account will help you and your partner monitor expenses closely, allowing one partner to keep a check on the expenses of the other.

The cons:

• When it comes to sharing a bank account with someone, lack of independence is an issue commonly faced by newlyweds, especially younger generations. If both partners have an independent source of income, having to share it with someone, even your partner, can be uncomfortable. Also, until now you weren’t answerable to anyone when it came to spending your money. A joint account can change this dynamic.

• In case the marriage or your relationship doesn’t work out, dividing the money deposited into this account can lead to arguments.

• When two people share a joint account, they both have an equal right to withdraw all of the money at any time. One partner can even choose to lock the other person out of the account. This can cause a lot of trouble if all your money was deposited in this account.

• If both you and your partner have debts, having only a joint account means all the debts will be repaid from this account. For you, that might mean, if in a particular month your partner spends a little more than they should, your money will be used in repaying their debt. Not everyone is comfortable with this arrangement.

For women, the best way to decide whether to opt for a joint account is to have this conversation with their partner as early in the marriage or relationship as possible. You can even consider talking about this before your wedding. Many couples who have a joint bank account also choose to have their accounts. They use the joint account to pay bills and share common expenses; while keeping their accounts for personal use.