Managing household expenses: separate or joint accounts?
Congratulations! You and your partner have decided to move in together. But living under one roof means you’ll need to work out how to manage your joint expenses. Rent, shopping, insurance, romantic getaways, school fees for your (future) children – is there a way to cover everything without giving up your personal bank accounts? Let’s follow the lives of two fictitious couples who have adopted different approaches. Which do you like best?
Barbara and Guillaume: “We’re together, but our accounts are separate”
Barbara and Guillaume elected to keep their personal accounts, and not to open a separate joint account. They each manage their own expenses. For them, this is the easiest way to avoid money-related spats. If one of them wants to splurge on 500 grams of white truffle this month, they’re free to do so, just as long as they can still cover their share of joint expenses agreed in advance.
Barbara and Guillaume have drawn up a list of recurring monthly expenses that they should share, including rent, water, electricity and even dog biscuits for their Labrador, Rookie! Since they don’t have a joint account, Guillaume pays the rent directly from his account, while Barbara takes care of the rest. This splits the total expenses evenly in two. Because their salaries are almost identical, the maths is easy.
Sometimes, not splitting things evenly is really the fairest option.
Their friends Sandrine and Axel also have separate accounts, but divide the total proportionately. Sandrine earns more than Axel, so she pays 60% of the joint expenses. Sometimes, not splitting things evenly is really the fairest option.
Guillaume generally pays the bill for unforeseen or leisure expenses like household repairs, replacing the brakes on their car and trips to the cinema. Barbara then transfers her share to Guillaume’s account.
These days, online banking means you can transfer money in just a few clicks from your computer or smartphone. Barbara also uses a special app to settle the accounts at the end of the month. It’s very handy, and can even be used with groups of friends to keep track of who owes what.
Barbara and Guillaume are planning to buy a house. They’d like to keep their current system, but know it might not work for this type of joint investment. In terms of savings, it’s not easy to manage shared funds without a joint account. They each put money aside separately, but this makes it hard to keep an overview.
Maybe they could learn something from Jérôme and Marie-France – let’s see what they chose to do!
Jérôme and Marie-France: “We didn’t want all our money in one place”
Couples share just about everything – at least that’s how Jérôme and Marie-France see things. They’ve kept their respective bank accounts, but opened a joint account to make it easier to manage their household expenses. To them, it was only logical that each should fund their own hobbies, especially since they’re completely different. Jérôme is a paragliding enthusiast, while Marie-France is afraid of heights, but loves oil painting. Each of them finances their respective hobbies from their own personal accounts.
Payments are made from a joint account that they both pay into from separate accounts online.
However, there are still a number of questions to answer in terms of settling the monthly expenses. As with things like internet or shopping, their mortgage payments are made from a joint account that they both pay into from separate accounts online. Like Barbara and Guillaume, they worked together to plan their monthly budget. It consists of clearly identifiable, recurring expenses, which makes automating payments that much easier.
They also each have a debit card for withdrawing cash from the joint account. This means they can do things like catch a film, eat out or even buy a microwave without a second thought. If these costs aren’t included in the budget, they just make a transfer from their personal account to the joint account.
Jérôme earns 30% more than his partner but still wants things to be split fairly, so he covers 30% more of the shared expenses, plus unforeseen costs and leisure spending.
Their arrangement makes saving and investing easier too. The joint account comes with a savings account in which they’ve agreed to deposit a set amount each month.
It is entirely possible to use separate accounts when managing household spending. You just have to decide who pays for what, and whether to split the costs evenly or not. Still, at the end of the day, there’s no doubt that the easiest method is to open up a joint account. You don’t have to give up your personal account, you’ll know how much you’ve saved together, and you can even make major investments as a couple.
Mortgage
Personal loan
Savings