Joint or separate bank accounts?

There are many ways to declare your commitment to someone, but does marriage really mean you should also join bank accounts?

You've said 'I do', dipped your toes in the turquoise waters of a tropical island somewhere, and now you're wondering if the smart money move is to join bank accounts with your newly-wed, right?

After all, you are planning to start a family soon.

But, before you call the bank, it's best to make sure you're both on the same financial page. This means having consistent money goals and values.

To work out if you have similar spending and budgeting habits, find out how much (or little) cash flow you are both comfortable with, and what percentage of your wages can be shared for expenses and savings alike.

Then way up some of these pros and cons for sharing a bank account.

PROS

HAPPINESS: Couples who pool their money are happier, according to 2013 US research.

SAVINGS: Once you have a clear idea of your cash flow FinancePath's Your Smart Money Tools can help you can set some realistic financial goals together.

LESS FEES, GREATER EASE: Having one account means less admin, lower costs, it's easier to manage and keep track of your expenses and earnings, plus your funds are readily available.

OFFSET: If you have a mortgage you can offset your joint bank account against your mortgage to help lower interest repayments.

CONS

LOSS OF FINANCIAL INDEPENENCE: Your other half will see where and how you spend.

OVERDRAWS: It is possible that both people can make withdrawals unknowingly to each other resulting in overdrawing the account and hefty penalties.

JOINT DEBT: One person may enter the joint account with more debt than the other be it student or car loans, credit card debt or child support. This can mean you both become responsible for the debt.

ROCKY ROAD: Should your relationship hit the skids, it's easy for your spouse to make sudden withdrawals leaving you penniless.

If you're unsure whether a joint account is for you, perhaps the best solution is to have three accounts one for you, one for your partner, and a joint account. Have your wages deposited into your individual accounts, and then agree to put a certain percentage of each wage into the joint account every month, you can even set this up to be automatically transferred.

The information in this article is intended to be of a general nature only and is subject to change.