Suze Orman seems to be the Martha Stewart of money these days, minus the felony conviction. She gives out her financial advice in books and on television.

Suze To Couples: Keep Separate Accounts

I came across an article about how Suze has been recommending that couples keep their money separate. Suze writes about her partner: “K.T. and I have been together for quite a while now, we don’t have one joint account. Does it keep us from loving each other totally? No. Would it keep us from stepping in and helping each other? No.”

Now the last thing I want to do is start giving out marriage advice, so I will try to offer my opinion strictly from a financial standpoint. From that perspective I don’t like the idea of couples keeping separate accounts.

How It Works

I have heard a lot of advice from people about how couples should handle their finances. Many people have suggested to me that couples should keep separate accounts, as Suze suggests. They argue that neither person needs to worry about the spending of the other. I have talked to couples who split it up where one person pays the mortgage, and the other person pays certain bills.

How Does This Make Sense?

Those in favor of each person in a couple handling their finances separately can at times make a good argument. If one person spends money in a way that the other finds frivolous, then separating their finances can make each feel better about spending.

Efficiencies Of Scale

On the other hand, dividing finances destroys a lot of the efficiencies that only a couple can leverage. I think that my wife and I are fairly typical in that we both have very busy schedules. While I would like to think of myself as fairly organized, it does take a significant amount of time to pay the bills, prepare taxes, and organize all of our finances. If we kept our finances separate, it would take nearly double the amount of time. Actually, it would probably take more than twice as long, since so many bills would have to be divided, and countless joint expenditures would have to be tracked and accounted for.

Division Of Labor

By combining our finances, we also take advantage of a division of labor. I am in charge of arranging payment of most of our bills as I was doing a better job at it when we met. As time goes on, I get better and better at it. My wife focuses on other parts of our finances that she excels in, such as dealing with health care bills and insurance. As the green thumb in the family, she also deals with our lawn maintenance bills. In this way, we are both evolving as experts in our respective fields more quickly than we would if we each had to be a jack of all trades.

Reward Card Synergies

Of course, we also retain many advantages of pooling our finances when it comes to reward credit cards. We often apply for the same reward card twice, once in each our names, in order to double the sign up bonus. Another strategy of ours is to request an additional card for each other, as sometimes there is a bonus for adding an additional card holder. In practice, we both try to allocate our spending on the same reward card account, as to accumulate larger rewards more quickly.

It Just Always Seemed Right

There are a lot of rational reasons why joint finances work for my wife and I, but probably the biggest reason we chose to do it that way is that we couldn’t imagine doing it any other. Both of us came from families that also managed their money jointly. Neither ever heard our parents deciding which one of them should pay for one thing or another. To us, marriage is the ultimate in pooling resources including biological, emotional, habitation, and child care. It just never occurred to us to share our house, our bed, our child, and our families, but not our bank accounts.

There Is No One Size That Fits All

Now, far be it from me to suggest my situation, or yours, is the same as Suze Orman’s Suze, it turns out, is in a committed same sex relationship with her partner, Kathy Travis. According to her wikipedia entry, they would prefer to married for financial reasons but presumably there is no same sex marriage where they reside. Suze is also worth over $10 million dollars. Needless to say, my wife and I are in a very different financial position. My wife and I trust each other to spend our money responsibly, and we have agreed not to spend more than $100 without asking each other for their input. So far, we have never had a fight about money, but there is still time.

Where Does That Leave You?

Each relationship is different, and couples do change arrangements as they grow older and their finances change. There are some very significant advantages to organizing your credit cards jointly as opposed to individually. At the very least, I hope I have been able to offer you some constructive arguments for and against sharing finances.

Have a question for us? Leave a comment below!

Keep reading:

• Financial Lessons from 10 Years of Marriage
• Do You Lie to Your Spouse About Your Credit Cards?
• How Does Co-Signing A Loan Affect Your Credit?

This entry was posted on Wednesday, February 11th, 2009 at 22:22 and is filed under Debt Reduction FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.