There are many approaches to managing joint finances. You can keep your money completely separate, merge it completely, or be somewhere in the middle. We fall in that "somewhere in the middle" category. We've also found that it helps us to have separate accounts for separate purposes.
We have the following bank accounts and retirement accounts:
3 total checking accounts:
1 joint checking account: all of our joint monthly bills are automatically debited from this account. This includes our mortgage, utility bills, groceries, gym membership, and cell phone bill.
2 separate personal checking accounts: Chris and I each have a personal checking account and use these accounts to pay for personal expenses like clothes and haircuts as well as some miscellaneous joint expenses like going out to eat or minor trips to Home Depot or Target. Since Chris makes more money he ends up paying more frequently. We also try to put expenses like this on a credit card in order to earn points.
5 total savings accounts:
2 separate personal savings accounts: Chris is only paid 9 months out of the year so he needs a savings account to save for summer bills. In addition we also use our separate savings accounts to save for personal big ticket items (such as me saving for a newer car) and travel. Even when we travel together we usually contribute roughly equal amounts from our individual savings accounts.
2 joint short-term savings account: Before having a baby we just had one joint short-term savings account. We started a second one when we found out we'd be parents so that we could prepare for the added expense of a baby. We currently use the money we saved in that account to offset the cost of daycare.
The other short-term savings account is used for house purchases such as furniture and general improvement. We tend to save up a bit of money, a few hundred dollars or so, and then use it up so there is a lot of flux in this account.
1 joint long-term/emergency savings account: We are working towards saving up six months of living expenses so that in the unlikely and unfortunate event that we BOTH lost our jobs we would have a six month of cushion before we were in real trouble. This account also might be used if our air conditioner/fridge/dishwasher suddenly went kaputz and we couldn’t afford to replace it otherwise.
5 total retirement accounts:
2 separate 401(k) accounts: We each have 401(k) accounts through our employers. I contribute 7% of each paycheck to mine and my employer contributes 7%. Because Chris works for the state his is a bit different, he must contribute 11% of his paycheck but his employer also contributes 9%. If he stays with Arizona State University for 10 years he will be guaranteed a pension when he retires.
1 403(b) account: I also have a 403(b) account and contribute 3% of my paycheck; my employer does not contribute to this account.
2 separate Roth IRA accounts: We each have Roth IRA accounts that we contribute to. Chris contributes more regularly to his than I do to mine.
Aaaaaand there you have it! A grand total of 13 different banking accounts. It might seem a bit overwhelming when you read it all at once but it’s a system that functions very smoothly for us. And that's the key with finances, it has to work for YOU.
As always, I'm happy to answer questions. Leave a comment or send me an email.
Happy financial planning!