Joint Account Chaos

With the new year in full force, it seems as if many people are focused on their finances and financial goals for 2012. I would be lying if I didn't say that Steven and I have goals of our own. Through emails and private conversations with many blog readers, I have noticed that many couples may struggle with managing a joint account together.


I thought I would share a financial tool that has saved Steven and I a great deal of heartache over the past few years.

In preparation for our marriage, Steven and I opened a joint account and began depositing all income into that account. We established a budget and intended to have only one checking account that all bills and personal spending would flow through.

After about two months, it became very clear that method was not going to work. You see, I'm an accountant. I like to know where every single penny goes. I check my bank balance every morning and I know exactly how much should be there. So if Steven stopped at the gas station on the way home and spent $5 from the joint account, I became annoyed. If that happened numerous times over the course of the month, I became a little more than irritated. It was too easy to overspend on eating out and entertainment because we didn't have a clear way to track our spending.

It felt like joint account chaos.

In my opinion, it's very hard to create and stick to a budget when both people have full access of the joint account and have the ability to overspend without consequence.

So we discussed our options.

I wasn't comfortable with each person having their own checking account and us "splitting" the bills. To me, that felt more like roommates than partners.

I suggested we each get a weekly cash allowance for personal shopping. I could hand Steven cash and if he wanted to grab something from the gas station or lunch with a buddy, he could use his allowance. That would make budgeting for entertainment and personal spending much easier because I knew that each Monday a certain amount would be withdrawn from the account.

Steven was weary of receiving cash because it's too easy to spend. I also realized that this "cash method" would require me to go the bank once a week to withdraw funds. So we quickly decided against it.

Thankfully, we came up with a solution that works perfectly for us.

We maintain our joint account to which all earnings are deposited and from which all bills/living expenses are paid. But we each have an individual account that is tied to the joint account. At the beginning of each week I transfer our weekly allowance into our personal accounts and we are free to spend that money as we please. If we don't spend all of our weekly allowance one week, it stays in our personal accounts as extra to be used later.

I truly believe this has saved numerous arguments over finances. If one of us needs a little extra cash for whatever reason, we just discuss it. Or if we mutually decide to spend additional funds from the joint account for something that we both want or for something for our home, we discuss it.

This method has not only saved my sanity, but more importantly has allowed us to stick to our budget by forcing us to keep our personal spending within the amount we have agreed upon. It holds us both accountable to treat funds in the joint account as "family" money that we cannot just spend without discussing it with the other person.

I would highly suggest this method for any couple who struggles with overspending or tracking your expenses when both spouses have access to the joint account and spend at will.

What about you - any budgeting or money managing tips that have proven to be very successful for you over the years?