If you have joint financial responsibilities with someone, like a partner or family member, you may have one bank account that you share. This can be convenient for things like paying common bills, such as a mortgage or daycare tuition, or tracking progress toward a mutual savings goal.
While a shared account often makes sense for these purposes, there are many benefits to having your own account, as well. You can use a personal account to gain independent financial management skills, create a positive impact on your relationship, and more!
For some people, having multiple bank accounts helps them more easily manage their finances.
For instance, when you have shared, set expenses with someone else, it makes sense to have one place where each person’s “share” of those costs is deposited each month. That way, you can both monitor the balance and outgoing payments to ensure bills are paid on time. Also, having separate accounts for individual expenses, such as gym memberships or leisure spending, allows each person to see what they have left to spend once their joint commitments are met.
Following this structure can help establish and maintain accountability in meeting combined expenses, while also offering some flexibility and freedom for each person to manage their own funds.
Because you’ll have to monitor the balance, reconcile any inconsistencies, and manage deposits and withdrawals, having your own separate bank account requires you to play an active role in financial management. These are important skills to maintain, even if you’ve combined finances with someone and are not the primary person responsible for paying joint bills.
In addition to keeping these skills sharp now, maintaining an individual account helps prepare you for the long term, as well. While not pleasant to think about, there are circumstances, such as divorce or the loss of a loved one, where you may become fully responsible for managing your financial commitments. It’s better to become, and stay, involved in money management now so that it’s not an added hurdle when dealing with a difficult situation in the future.
You and your partner may have different mentalities when it comes to managing money, and as a result, may prefer different budgeting styles. While there may not be wiggle room in terms of what joint bills you have and the need for you both to ensure they’re paid, maintaining separate accounts allows for each of you to manage your remaining funds in the way you’re most comfortable.
For instance, you may prefer to use cash and follow an envelope method for budgeting, while your partner may prefer to charge daily expenses on a credit card to earn cash rewards. While neither style is right or wrong, one or both of you may become frustrated if you feel forced, or are trying to force your partner, into following a different style. This frustration can be eliminated if you’re both given the freedom to use the method that works best for you and your individual accounts.
In addition to pushing you to keep your money management skills in shape, having your own separate bank account can have other personal and relationship benefits, as well.
Personally, having an awareness of, and involvement in, money management can provide a sense of individual empowerment and encourage both parties to participate in conversations about finances and joint financial decisions.
Additionally, having separate accounts gives each person a sense of control. Some couples find it helpful to set a certain amount of “fun” money aside every month that each partner can spend however they’d like. Then each person is aware of the balance of their own account and has freedom in using it how they’d like. Using separate accounts for this allows for individual purchases, such as a gym membership or a new outfit, to occur without one person feeling scrutinized.
Having separate accounts can also empower individuals to continue striving toward their own independent financial goals.
This commonly occurs when an individual has debt that they incurred on their own, such as student loans or credit card debt. An individual may have a desire to work toward paying this off on their own and want to feel the sense of individual accomplishment once they do.
If you’re interested in maintaining both joint and separate accounts, but are concerned that it’ll be cumbersome to do, we can help alleviate that stress for you. We make it easy to manage your finances both individually and together. If you’re currently a joint owner on your partner’s account and you’re not already a member, it’s likely that you’re eligible to become a PSECU member on your own and open your own separate account. Once your individual account is open, you can link it to your shared account, making it seamless to transfer funds back and forth, as needed.
To get started, become a member today.