Good money management is important when times get tough. One of the key aspects of money management which couples struggle with is how to manage their bank accounts and whether their finances should be separate or joined.

Traditionally, when couples married, they united not just their lives but their bank accounts. In days gone by when women took the role of unpaid homemaker, it was most often their husbands who took control of the finances. The changing role of women in society, combined with the changing nature of relationships, has significantly influenced how money is managed by couples. Women are increasingly becoming financially independent as they build their careers. Couples are choosing to marry and have children later or not at all. Relationships are more fluid than they used to be and of course same-sex relationships are on the rise. While it used to be that combining financial resources was symbolic of the level of commitment in a relationship, this is no longer so. However, the way in which money is managed definitely has consequences for a relationship. Making decisions about whether to have separate or joint accounts is just as important for the health of a relationship as it is for financial health.

There are several benefits of pooling financial resources:

• It makes it easier for both partners to be involved in all aspects of managing finances within the relationship, including paying bills, setting up investments and forward planning
• Jointly owned accounts make things easier for estate planning. In the event that one partner dies, the account will transfer to the survivor without having to go through any legal process
• Pooling simplifies everything so that nothing falls between the cracks or gets duplicated
• With joint accounts it is easy for each partner to get an overview of total finances
• All available financial resources can be used to achieve jointly agreed goals

However there are disadvantages of joint accounts:

• Some people can feel a loss of financial independence
• There can be tensions or resentment, for example where partners have different attitudes towards spending and saving, different risk appetites, or different attitudes towards debt.
• Arguments about money resulting from tensions and resentment can contribute to relationship breakdown
• Partners can bring different levels of savings or debt into a relationship which would be unfair to share
• Joint accounts can be messy to undo if the relationship ends
• Having everything jointly owned can lead people to setting up hidden accounts as a way of achieving a level of financial independence

For most couples, a mix of joint and individual accounts is the optimum solution. At the very least, it is useful to have one joint account to pay household bills to avoid the inconvenience of having to add up all the bills and divide them by half (and yes, unbelievably there are couples who do this!). It is also important that each partner has one individually owned account which they can use for personal spending or saving. Then it’s a matter of working out what happens to the rest.

There is no one-size-fits-all approach to managing money in a relationship. The length of a relationship and depth of commitment will have an impact on how money is managed. Personalities are a factor too. People who are strongly independent or who have fears and anxieties around money are more likely to want to have their own accounts. It’s a matter of finding a solution that is practical, that meets the needs of each partner, but also allows financial resources to be used in an optimum way.

It is important to have a shared vision of the future and agreed goals that both partners strive for. While this may be easier to achieve with joint accounts, it can also be attained if finances are managed separately so long as there is good communication and sharing of financial information. It is the end result that counts.