When I got married, I was excited to share everything, including money, with my new husband. But a few months in, I quickly realized that our blended family needed separate bank accounts to thrive.
Before I settled down, I secretly judged married couples who didn’t combine their finances. I assumed that meant they had trust issues. But marrying a man with four kids and an ex-wife meant managing our money was more complicated.
While we did initially combine our money, it became clear a couple of years in -- after a sticky discovery process between my husband and several lawyers -- that we needed a better strategy.
For our family, the most practical solution was more bank accounts. It might sound harder, but keeping independent financial accounts made handling our money simpler once we had established a few rules. It also allows me to maintain the financial security and autonomy I had enjoyed for so many years prior. And while no one gets married anticipating a divorce, having separate bank accounts and your own money is a must to ensure your financial independence.
Money questions come up a lot when you’re getting married, and especially when you’re combining two families. It’s a topic I’m well-versed in as the CEO of StepFamily Solutions, host of The Stepmom Diaries podcast and a proud stepparent myself.
Whether you’re uniting a blended family or you and your partner are grappling with competing money goals, separate bank accounts may be the answer. Here’s how we manage our finances now to reduce money arguments and ensure our own financial autonomy.
We schedule weekly money dates
Talking about money can be difficult, but not having financial conversations can hurt your relationship. My husband and I sit down almost weekly to go over our finances. We talk about bills that are coming up and when and how much money needs to be moved into our joint account. We also discuss upcoming expenses (think seasonal costs like holiday, birthday or graduation presents) that we need to plan for and whether they’ll be paid individually or from our joint account.
Given that money is one of the biggest things couples fight over, these regular meetings do much more than just help us stay on top of our finances. They take money off the table as a potential source of conflict.
We have a shared checking account for bills and daily expenses
Keeping money for shared expenses in a joint checking account is handy for paying the mortgage or handling the bill at a restaurant. But my husband and I don’t have our paychecks directly deposited into this account. Instead, we each transfer money into this account at the beginning of the month.
We have had a joint USAA checking account since my husband was in the military, and this bank offers low to no fees on their accounts, incredible rates for home and car insurance, easy (and free) access to ATMs and unparalleled customer service.
If you’re not eligible to open a USAA account, I’d recommend looking into a credit union. Most credit unions have low fees and offer competitive interest rates on savings accounts, mortgages and car loans.
We also share an emergency fund
It seems like every year, we face surprise costs, like that time we had an expensive car repair pop up or an oven that failed in the lead-up to Thanksgiving dinner. To handle these short-term emergency costs, we keep a small amount of money in a joint savings account. When something comes up -- and it always does -- we use what’s in this emergency fund to cover the costs and later transfer money to replenish the funds.
Like our shared checking account, we use USAA for this. Although its savings account interest rates are not nearly as competitive as other banks, it does have other advantages, like low minimum balances and great customer service. We ultimately decided that those advantages, paired with the convenience of having a savings account at the same place as our shared checking, were worth earning a slightly lower APY.
Our paychecks go into our own individual checking accounts
Both my husband and I have our own checking accounts where our paychecks are directly deposited. We fund our joint accounts from these and then use the rest for our own expenses. And any extra left in those accounts gets spent at our discretion. It’s a great way to prevent arguments over money if you’re married to someone with different spending habits.
For example, my husband doesn’t understand why a person needs more than four pairs of shoes. Meanwhile, my closet shelves are sagging from my bag and shoe collection. We spend far less time debating why I need another pair of shoes when he knows that the money for them comes from my own discretionary account rather than our joint account.
I keep my primary checking account at USAA so I can easily transfer money into our joint account. Opening an individual checking account at the same institution as your shared bank accounts to ensure transfers are fast and easy. But you can also look for high-yield checking accounts at online banks to earn a little extra on your balance. Or, if cash or in-person service is important to you, consider a credit union or a big bank with nearby branches.
I have a second individual checking account that I’ve had since high school. I don’t use the account often; it’s largely for transfers with my parents and other miscellaneous transactions. Unless you have a specific reason for it, I don’t recommend complicating things with a second individual checking account.
My individual savings account keeps me financially secure
I made money on a few investments before I met my husband. After talking to a financial advisor, we decided I should keep this money separate in my money market account, where it could continue to earn interest but be easily accessible. This came in handy when we suddenly needed a new HVAC unit last year -- an emergency cost that outstripped what we kept in our smaller emergency account.
This account plays a dual role: it lets me keep my interest-bearing assets separate from my husband’s assets, and it serves as a secondary emergency account.
You might prefer to keep your own investments or savings in a separate high-yield savings account rather than a money market account. Both offer high APYs right now and are a great place to park extra funds that you don’t want to mix into a shared savings account.
We keep our retirement and investment accounts separate, too
Our retirement accounts have, of course, remained separate, but I have also kept my investment accounts unconnected. We got married when I was 41, and I had built a good-sized investment portfolio that we both agreed made sense for me to maintain.
We made sure to list each other as designated beneficiaries for all our retirement and investment accounts. If something were to happen to either of us, having a designated beneficiary means our individual assets would be available immediately to one another without having to worry about extensive paperwork or any sort of probate process. I recommend completing this step and reaching out to a financial advisor or attorney if you have questions.
Every family has different financial needs. Figure out what works best for you
Whether you’re getting married, moving in together, starting a family or combining two, you must spend time thinking about the future. Long-term planning is incredibly important to any family’s financial health, particularly that of a stepfamily. While separate and individual accounts work best for my family, your situation might be different.
I highly recommend hiring an estate planning lawyer, preferably one who has worked with stepfamilies or a family structure like yours before. They can help you navigate wills and health directives, especially if you’re worried your situation may be complicated. Even if money is tight, it’s an expense well worth making to ensure your long-term planning is in order.
Keeping separate finances might seem complicated -- but it doesn’t have to be. Put some thought into how you and your spouse should manage money from the beginning. Careful consideration up front should pay dividends in the future and help you avoid complicated financial messes in the present.
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