Telling stories is what bloggers do, and most bloggers tell stories because the people in their lives are tired of hearing them…at least that’s what my wife thinks. As we move along in this process, we’ll occasionally take a detour to story time. This gives me the chance to share some personal aspects of our financial journey to being debt-free, but also breaks up the instructive nature of many of my posts.
Today, I’m going to tell you about bank accounts. Before I was married, the only married couple I really had to look to for advice was my father and my step-mom. They were married when I was about 14 and they both had long lives before their marriage. They both came into the relationship with their own money, their own spending patterns, and their own bills. So, when they were married, they retained their separate bank accounts. Makes sense, after all, when you have two people, two incomes, and two expense streams.
So, when the time came for Heather and I to join our financial lives, it seemed reasonable to have separate bank accounts. That idea was slightly complicated when we moved in together and Heather’s bank didn’t have a branch in Washington, DC. Then we started looking at the numbers and realized that, unlike my father and step-mom, we barely had enough money for one bank account, let alone two. It was a bit of an anti-climax, deciding to keep the one account. When you’re engaged, you place a lot of importance on the little things that you think matter, like changing last names, but you soon realize those aren’t important issues. The bank account was the same way. I thought it’d be important, but ultimately it didn’t really matter, at least not at the time.
But, remember, every action you take builds a memory, or a habit, that you’re going to appreciate or regret in the future. Having one bank account, or more accurately, only having enough money for one bank account, was one of these small things that we didn’t realize would impact our lives in the future.
Looking back, I can’t imagine having two bank accounts, or at least two checking accounts. As you’ll discover in future posts, we now have a few bank accounts, but only one that we use for daily expenses. Having one bank account means being accountable to your spouse or partner for your spending. If you have separate bank accounts, it’s too easy to view the money in your account as your money. In reality, though, all the money belongs to the marriage, not to the individual. When you have one account, you have to discuss your spending and be accountable to your partner about how much and why you spend your money. You can’t just go blow $100 on something you “want” without discussing the impact with your partner.
At the same time, it’s important to not make one partner dread talking about spending to the other. Someone is always going to be the financial spouse, the one that checks bank statements and balances the books, so it’s important to provide enough freedom where both partners know they can use the money, but enough accountability so neither spends recklessly. For Heather and I, we decided on an upper limit to personal spending and didn’t exceed that without checking with the other partner.
This level of accountability was very important as we started chipping away at our debt. The accountability ensured we were both on the same page, financially. When we decided to do “Our Debt Year” this level of accountability was already a habit, and a good one. It meant we didn’t have to argue about whose money we’d use to pay off a debt, or whose account a bill payment came from. We saw the money as collectively “ours”. This way, Heather never felt slighted when we used extra money to pay off a credit card debt I ran up and I never felt taken advantage of when using my freelancing money to pay off “her” student loan.
So, what works for you? Do you have one account or multiple accounts? How has either option helped you get control of your financial situation?