Should you have a joint bank account? Here’s what to know first – The Irish
The problem reads like a Leaving Certificate question: If Jess and Dave are engaged and moving in together and Jess earns €75,000 and Dave earns €40,000, is it fair they split rent 50/50? Even if Dave wanted to move somewhere cheaper?
It’s a dilemma many couples face without the benefit of an answer sheet and a test result to tell us who got it right in the end.
When it comes to research on what causes relationship breakdown, financial disharmony is a repeated guest star and usually sits around the top three reasons given for splits.
If money can be such a marriage killer, why haven’t we come up with the perfect solution to manage it when we shack up with the love of our life.
[ Joint accounts: if one of us dies, can the other access the money? ]
One reason is that every couple has different values, incomes, assets and cultural expectations around who pays for what, making a one-size-fits-all rule unlikely to work for everyone.
The other is due to societal and economic changes like record numbers of Irish women participating in the workforce, the introduction of divorce, the number of two income families rising, gender roles shifting, costs increasing and the legal recognition of LGBTQI relationships.
The money management relationship blueprints handed down by older generations often do not apply when two members of the household are bringing in income, expect to have equal say over where it goes and are responsible for paying the bills.
Millennials are more likely to keep their finances completely separate (38 per cent) over Gen Xs (13 per cent) and Boomers (11 per cent).
While a Newsweek Poll conducted this year shows that Gen Z, were less likely to split bills 50/50 in a couple.
Instead 40 per cent of them believed expenses should be split according to income, with higher earners paying a higher proportion. In comparison just 26 per cent of Gen Xers believe it’s fair for the higher earner to pay more than their fair share.
On TikTok, a Gen Z heavy space, videos with the 50/50 relationship hashtag have racked up 133.7 million views with the most popular content titled ‘Why 50/50 relationships do not work.”
It might seem counterintuitive that the generation raised in the advanced stages of gender equality is turning its back on splitting the bills regardless of pay and gender. But it’s equality or the lack of it when it comes to non-financial contributions to the household that’s causing the turn.
Various international studies show women are still doing the majority of housework, house admin and child care. Anti-50/50 relationship financial creators argue that until those responsibilities are shared equitably by partners, then neither should the financial responsibilities.
So if there’s no one hard and fast rule for everyone, what are some of the different options available to couples merging finances?
Joint or Separate accounts
If you’ve decided to stay together the first issue is to consider if having a joint account or maintaining separate finances is for you. There is also the option of having a joint account for particular savings goals like a house deposit or wedding fund where you contribute an agreed upon amount every month. Or a bills account where direct debits for the gas and electricity are set up but still maintaining separate accounts where individual paychecks are deposited. This means the personal savings, pensions and discretionary spending after the bills and joint goals are taken remains solely the business of each partner.
The joint vs separate account issue for couples divides the personal finance community. US guru Dave Ramsey is famously hardline on the issue, often saying “married couples shouldn’t have separate bank accounts.”
Ramsay says combined accounts lead to “better decision making” and “forces communication” between couples while encouraging them to share their “fears” and goals,” making the marriage stronger in the end.
Pro joint-accounters like Ramsay often point to research which suggests couples who pool their finances tend to report greater relationship satisfaction.
This was backed up by research published in March 2023 which examines a causal relationship between bank account structures and overall marital happiness by following couples who initially had separate accounts but merged them for the study. Indiana University researchers found that shared accounts led to greater transparency around money within the relationship and led to couples agreeing more to shared goals.
However before you go downloading joint applications to the bank, it’s important to consider the cons of one shared account.
For Carol Brick, managing director of HerMoney, having one joint account “makes sense” in cases where one partner is a stay home parent and one…
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