David Brooks has a column on the increasing number of married couples who have separate bank accounts.
The Wall Street Journal. The paper’s Work and Family columnist, Sue Shellenbarger, had a piece last week reporting that the number of couples who now have separate checking accounts is rising rapidly. Roughly half of all married couples now keep multiple accounts, according to a Raddon Financial Group survey.
Brooks ain’t happy.
I’m not saying that people with separate accounts have marriages that are less healthy than anybody else’s. I’m saying we should pause before this becomes the social norm. Private property is the basis for our market democracy. But private property in the home is an altogether trickier proposition.
For one thing, separate accounts can easily turn into secret accounts. A person’s status and resources inside the home shouldn’t be based on how much he or she is making outside it. A union based on love can easily turn into a merger based on self-interest, where the main criterion for continuing becomes: Am I getting a good return on my investment, psychic or otherwise?
The larger, far more important point is that in a society as individualistic as ours, it’s especially important to protect and nurture the countervailing institutions. It’s so easy for the powerful force of individualism to wash over and transform institutions – like family, religion and the military – that are supposed to be based on self-sacrifice, loyalty and love.
I posted something on this topic awhile ago. (I have to prepare Ian for speech therapy and run to the grocery store. More later w/links. But I wanted to post this for the blogger readers who arrive at lunch time.)
Apt. 11d 
We have shared accounts but separate accounts don’t bother me as long as it’s discretionary money for the little extras. What really gets me are when the separate account for one spouse is their “allowance” from the other, higher earning spouse. Case in point would be my husband’s sister. Her husband makes several hundred thousand dollars a year, and she is given a monthly allowance to run the household. This allowance is enough to cover things like the mortgage, utilities, food, pre-school, with some leftover discretionary money for movies and take-out and such. However, at one point they needed to have termite treatment performed on the house at a cost of about $1000. She actually had to save up for the termite treatment. Ditto for things like a new washing machine when the old one started to fail. That is just absolutely bizarre to me.
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Re “separate accounts can easily turn into secret accounts”:
My ex and I had joint accounts. Nevertheless, he squirreled away almost $10,000 in one account without bothering to record the deposits. Sure, I should have paid more attention, but the point is if they’re going to lie, they’re going to lie–one reason he’s my ex.
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I might have a little more patience for Brooks’ attitude if the “you just got divorced and now you’re penniless” pile was at least half men. But it’s not.
If you’re the half of the marriage that has scaled back your career to take care of the kids, you’re in a scary position. Everything depends upon your spouse sticking around. Would it make you feel better to have some of your own money? Maybe, maybe not. But it’s important to remember that people are making these decisions based on very real threats to their economic well-being, not on romantic ideal.
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I know that some of my friends who keep separate accounts do so out of inertia — you come into the marriage with two established identities and rather than close one account and deal with all the hassle of changing your direct-deposit and automatic-withdrawal data, you just keep both of them running.
What’s the problem, as beth points out, is when one or the other keeps nasty money secrets. Having a joint account won’t much help there.
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We have separate accounts plus a joint account that we both contribute to. This was largely my wife’s idea, as both of her parents have divorced and remarried several times, and it gets really messy when the finances are too intermingled.
I make a pretty comfortable living, and we both communicate very well, so money just hasn’t been an issue. When she quit her job to go back to school, Instead of an allowance, I’d pretty much just give her whatever money she asked for, and she in turn tried not to ask for too much and, on her own initiative, tried to do her best to contribute when she can and in other ways. Our model is probably not one that can be easily copied.
But personally, I don’t think combining accounts solves very much of anything. A couple that stays together because their finances are entwined isn’t any healthier than a couple that stays together “just for the kids.” You have to want to stay together and both be committed to the relationship for it to work. Otherwise, any external forces holding you together will just be another source for resentment.
Of course, I’ve never thought of “divorce” as a problem, but an effect of the real problem. That problem being marriages that should never have happened in the first place.
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Separate accounts can be useful for rough budgeting — say, if I have money in my account, that means we can afford a vacation. But I do think that spouses should have their name on eachother’s accounts (we don’t — yet), especially if they don’t have wills. My understanding is that getting the money in case of the death of a spouse can be difficult otherwise. We have separate accounts through inertia. Although I hardly make any money any more, I like having an account with “my” money in it, even though I consider his account “our” money. Not fair, but not uncommon, either, I don’t think.
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Do people persist in having separate accounts after children enter the picture? Or after homeownership? We had joint accounts from more or less the start, and certainly sicne we married we’ve both thought of any money entering the accounts as jointly ours. I don’t think either of us thinks of any money as ‘mine’.
But, there is one major annoyance of having joint acounts, which is the unavailabilty of the option to give her a gift which she doesn’t know the price of.
It must be pretty easy to figure out whether having separate accounts corrolates with a higher divorce rate. I’d bet it does, but that they have a common cause.
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My wife and I have separate accounts, largely because it means we don’t have to bug each other about atm withdrawals or who wrote which checks when. It also means that we each have money that’s ours alone, which means (in our case at least) that frivolous purchases don’t have to be cleared with the other, gifts to one another feel like gifts to one another. It helps that the mortage can be paid easily out of one salary; it wouldn’t make sense to have to write a check to one another to pool money to pay bills. In any case, separate accounts doesn’t mean separate bills/obligations/property; just because the mortage is paid out of one checking account doesn’t make the house the property of one person.
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I worked with a guy who had a three-account marriage. Each had a spending money account from which they could buy gifts, eat out for lunch, buy clothing, etc. Then they had a joint account that paid for family and home things. Most of the money went into that account. The one thing I thought was cool about these folks was that the guy, with whom I worked, probably made $80-100k per year, and his wife taught 2nd grade. He figured that they each worked the same number of hours, but she actually did more of the housework and child rearing, since he was in sales. Consequently, he put a much higher percentage of his income into the main account, and there was not a big discrepancy in their personal account deposits, so that she was not ‘punished’ for making less money. I’ve never heard of a couple doing that, but it seemed to work.
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We have one bank account. When we got married, we were so poor that it didn’t make much sense to put $2 in one account and $3 in another. Even if I started pulling in a hefty salary, I think we would keep it all together. It does simplify things.
But probably a majority of my friends have separate accounts from their husbands. And some have the three bank account model like ADM’s friend. And a couple of friends, with very healthy marriages, have secret bank accounts. Everyone is worried about divorce or likes the freedom of a bank account in their name.
Does this system of separate bank accounts generate distrust that could unravel marriages? Do pre-nups work the same way? Do separate bank accounts undermine the notion of a couple working together for the same goals? Do the separate bank accounts lead to comparisons about whose work is the most profitable?
Harry, it would be interesting to see some research on the correlation between separate bank accounts and divorce rates. I’m not as sure that we would see it. I think that there would be a correlation between separate bank accounts and a higher SES.
Ancarett, I liked the phrase “nasty money secrets.”
I can understand why many have separate accounts. There are some very good reasons to have two ATM cards. People have lost their faith in marriage. But I do think Brooks makes some good points, too. Self-fulfilling prophesy.
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My husband and I have the three-accounts system. It started out because we had our own accounts before we met, but we deliberately keep it that way. Last year, I signed up for a pretty expensive course of no immediate economic use. If I didn’t have my own money, I might have felt guilty using our joint money, and not have enrolled. Thus, I think that except for situations of poverty, it can be liberating to have your own account.
Moreover, the issue is not whether or not to have joint or seperate accounts, but whether or not to pool income. That’s where the real interesting questions lie. For two-earning couples, do partners contribute the same amount, or the same percentage, or do they keep the same amount or percentage for themselves?
There is some research done on this (I think Jane Pahl was (one of) the first to do research on this for England already in the 1980s), and it’s amazing what kind of complicated systems people have – and already had decades ago, and in countries that are (perceived as) far less individualistic than the USA.
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I had to laugh at Brooks’ column. We have separate accounts, partly because all of our bills are debited out of my account, and I’m way too lazy to change everything.
I also didn’t change my name when I got married, partly because I didn’t want to deal with paperwork. And I like my name.
I’m sure there are other, darker, issues involved in both decisions, but I’ll let David B. figure out what those might be. Personally, it works fine for us.
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A union based on love can easily turn into a merger based on self-interest, where the main criterion for continuing becomes: Am I getting a good return on my investment, psychic or otherwise?
Marraige has been that for 30 years, as far as I can tell. Love is great, but most of the people I know got married for other reasons. Love wasn’t enough of an inducement for marraige. Especially given the cost of divorce.
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The Medievalist in me (or that is me?) would like to point out that marriage has until quite recently been primarily about property and political alliance/kinship. So in this case, there are arguments to be made (historically) both for (in terms of dowry and morgengabe, for instance) and against (husband controls all joint property) separate bank accounts that have nothing to do with divorce.
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BTW, other bloggers have noted that the 11D commenters are the smartest in the blogosphere. They didn’t say that my posts are good, just that you guys were smart. Amused.
Yeah, Mo, I didn’t change my name either. We also might have kept separate accounts when we started if we had more to spread around, but it’s hard to say. I’m not sure if not changing your name is the same as keeping separate bank accounts. After all, money is a lot more complicated.
How couples pool their money is a key issue, Ingrid. Who pays for vacations, for home improvements, for daycare, for the kids’ ski pants?
Another interesting question is: are separate bank accounts good for women? On the one hand, it is a major safety net in case of divorce. On the other, women still make less then men. The different balances might magnify inequality.
Another question: Do separate accounts make childcare and other free labor even less desirable? Right now, I consider Steve’s money our money. I make zero carrying for the kids, but that fact is buried in our joint bank account.
And excellent point, ADM. It’s good to have a historian around.
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Laura: They didn’t say that my posts are good, just that you guys were smart.
Perhaps smart people have a thing for redheads? 🙂 Not implying causation, of course.
And incidentally, my wife didn’t change her last name either (she’s an ardent feminist). And our joint account is considerably smaller than our individual accounts. We both put about 5% into it, and it’s mostly for vacations.
Oh, and in case you guys haven’t seen it, Matt Yglesias posted on this topic.
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We are basically following the policy of my parents which is all money coming into the marraige that was mine is now ours, all paychecks go into the joint account, which is our only checking account. My wife and I both have accounts (including one joint account) that we pretend don’t exist that just act as savings accounts. My mother always had a separate account and it had way more money in it than my dad’s accounts (which were all IRAs I think) or joint accounts. My mom’s was considered the untouchable money and it became quite a tidy sum by the time my dad died after 40+ years of marraige. So I don’t think separate accounts are a bad thing.
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We have two accounts. But only for the perks. We moved to the midwest from DC. […Information Deleted…] It’s a nice one – so we wanted to keep it. I opened a 2nd local account when we got here.
Our paychecks go into the […deleted….] account. All the bills are paid from there. Any extra money (gifts, expense reiumbursements, rebates etc.) goes into the local account and that is our “fun” money.
We both have both our names on each account. But I refer to the DC one as “his” and the local one as “mine” – I’m not exactly sure why?
My big thing is the 401(k) savings. We sock a ton of money in from his paycheck, but mine will be significantly less due to taking so much time off for childbirth, and only working part time after children. Over a lifetime, that will be a huge difference.
What’s mine is his, and what’s his is mine – but I’m always acutely aware that the retirement savings in “my” name is so much less than the retirement savings in “his.” We’ve upped my contribution percentage higher than his in attempts to catch up. But I’ve spent most of my 30s at such a lower income – I’m never gonna catch up. That worries me.
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In my first marriage (18 years, 3 children) we started out with one main checking account because I worked and she was mainly a stay-at-home mom. The trouble started because she insisted on paying all the bills rather than me, but was terrible at keeping track of ATM receipts and also had a gambler’s attitude about sending out checks for bills or making checking card purchases before the deposit was credited.
In my second relationship (4 years, one 3 year old plus two remaining children of previous marriages) we had separate checking accounts from day one. This works marvelous because I don’t have to keep track of my partner’s ATM purchases plus I don’t have to be able to predict the future expenses for incidentals for her teenager that might occur before the next paycheck. In addition, I find she also has a bit of a gambler’s mentality about writing checks before the deposits clear, so by having separate accounts I don’t even worry about this problem.
Separate accounts are a great idea, particularly if the couple has numerous monthly transactions or one partner or the other spends money at risk of bouncing or tends to draw down the account too low to allow for emergencies. This keeps the peace but still requires that overall contributions to living expenses are shared fairly and saving for the future is done fairly. There should also be transparency at willingness to regularly and honestly discuss financial status, debt goals, savings goals, and any trouble spots.
The separate accounts method works well for me. In fact my partner asked me to set up a spreadsheet just like the one I use for her own checking account, basically a balance-forwarding biweekly calendar of projected income, expenses, and surpluses that I use to track and project each payroll period from the current to about 6 months ahead. We agree who pays which bills out of each account, and since I am the more careful budgeter I pay all the credit-rating sensitive bills, which is easy because I also earn more. She pays the non-credit-sensitive bills. We both plan how to save discretionary income such as vacations, 401K investments, and also help each other through anticipated rough spots, such as taxes, repair bills, and college costs.
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I’d maintained separate accounts with my wife. I also used to deposit my entire salary into her account as she didnt have a job.
Well, she upped and ran taking all the money with her.
And giving me some BS about you put the money in my account to provide for me in case of need…
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Ski Pants
Not to mention, you can eat all sorts of fondue and chalet-appropriate food and hi
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