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The Case for Separate Finances

It’s a sad fact that money is one of the greatest sources of tension between couples. As consumers, we tend to equate greenbacks with our success, status and, frequently, self-worth. Therefore, a lot is at stake when you decide to merge your finances with the one you love. Everyone has different ideas regarding where to spend and where to splurge, and that’s when couples run into trouble.

Some opt to duke it out, while others prefer to keep separate bank accounts to avoid some of the hassle. While no solution is foolproof, take into consideration the following factors when determining a plan that is right for you.

Family Ties

Initiated by generational, cultural and religious ideals, the way you spend and save your money is most likely the same way your parents and your grandparents did. Some say that having separate finances undermines the intention of marriage to merge your finances – and everything else, for that matter.

However, 50 years ago, enormous debt and child support payments weren’t common. With dual-income households and student loans in most household equations, how you split your money is becoming less about advice from Grandpa and more about individuality and autonomy. No one, including your parents, your church or your financial guru, should be telling you the “right” way to handle your finances.

Fitting Room

A couple’s money-management strategy is a comprehensive solution that should be based upon the different variables each brings to the union, such as kids, debt, inheritance and ownership. Common approaches to finances include separate accounts, joint accounts and a mix of the two. But remember, decisions about your bankroll don’t have to be all or nothing. Whether you choose to divide your finances proportional to individual income or split them down the middle in a joint effort, or have the breadwinner donate an allowance, the key is to create a plan that is fair and flexible for both of you.

If you choose to hybridize or isolate completely, identify the spendthrift and the saver in the merger to determine who is best suited for the ruling role – because there must one. Since the saver is probably better with money (and most likely a little more organized), assuming the treasurer responsibility should be welcomed by that person. The spender will most likely be grateful that someone with a little more money sense is taking over. Of course, there’s the possibility that there will be a little resentment that there is a new boss in town.

Divide and Conquer

While a shared account assigns one spouse the burden of bookkeeping and budgeting duties, separate accounts require both parties to retain some accountability while offering independence. Separate accounts allow you to buy those golf clubs or those perfect heels without a permission slip or even approval from your better half. If you are the cautious type, separate finances can render a safety net for the “just-in-cases.”

It’s no wonder why a growing number of couples are expressing some disenchantment with mutual money management. Having separate finances is forgiving, allowing each party to make mistakes or poor choices without draining the other. The separate system admittedly works best for those who have no children, roughly equivalent incomes and an established way to split the bills equally.

There is no obvious or apparent answer to how to divvy up your cash, as you need to decide what works best for you and your partner.However, talking, dreaming and even debating about money with your companion opens the door for communication and expectations and, ultimately, honesty.