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Separate Vs Joint Accounts

Posted on the 07 November 2011 by Badmoneyblog @badmoneyblog

Separate vs joint accounts

Joint vs Separate accounts

For millions of married Americans, this can be a touchy subject. There are some, of the emotional thought, that marriage equals joint accounts. Mostly, this emotional argument is based on a theory that, “what was once one of ours is now both of ours." However, this thought process can lead to many Bad Money decisions.  This is why you need to decide now, before you are married, how to handle the separate vs. joint accounts question.
One of the more common downfalls in the joint account concept is the joint check book. In new marriages, money can be tight. One member of that union writing a check against the assumed balance can send a young family’s finances spiraling out of control. 
Read the next paragraph and try to picture the scenario.  It will be easier for some to picture since they have experienced situations like this first hand.
You both know your account balance in the joint account is $200 and the bills are paid for the month. Wifey is at the clothing store, spends $150 on clothes, and writes a check. At the same time, husband is at the fishing store and writes a $75 check for new gear. The total of the two is obviously over the $200 left in the account. If you are lucky, the bank cashes both checks and charges you some crazy $29 - $39 fee. Worst case, one of the checks is returned, your bank charges you a returned check fee of $29- $39 and the merchant charges you $20 - $50 or more for presenting a returned check.

Some would argue that, with the newer Check 21 system, one check would be declined at the point of sale. However, I warn you that this is still a Bad Money decision. What if these checks were mailed? Or, the $150 check is a water bill that you forgot to mail, but the $75 check was not entered into the check book yet? These are all real scenarios and, like it or not, this happens to millions of Americans each year. The average American will pay five or six non-sufficient fund (NSF) fees per year. That statistic is staggering. That is upwards of $250 - $400 just to have a $1 overage.
You can vilify banks and other financial institutions in the above example, but that is the price you pay for incompetence. Because that is exactly what it is, marital incompetence if you both are writing checks from the same account.
Others might say that having a good budget would end these issues. However, there is more to it than that. What if your wife disagrees that you wanted to spend $75 on fishing supplies, but she sees clothes shopping as a necessary expense? How about her $10 coffee at
Starbucks? This may be frivolous in your eyes, especially if you bounced a check because you did not "budget" for $10 of coffee this month. The point is, with a strict budget, small purchases can be scrutinized by either party, and this leads to arguments. Think that is a marriage myth? Well, according to a recent story by The Street, 61% of couples admit that budget discussions turn into arguments about money. Who needs that kind of headache?
Here is a simple solution to all of this; separate accounts! In the days of modern banking, you can transfer money between accounts, and write checks, with a mouse click. So why burden yourself with thoughts of anger towards a significant other over something as trivial as a few dollars. 
Here is a great blog on the topic of marriage and money as well --->
For an article on mistakes newlyweds make with money, click here --->

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