HSBC: Managing Your Money As A Couple

June 8, 2015

[Advice column by HSBC Bermuda]

My husband suggested that we close our individual bank accounts and open one joint bank account. I’m a little hesitant to combine all of our money, but want to understand all options before I make a final decision. Can you help?

Options for managing your money as a couple

Many people decide to merge their money when they marry, either fully or partially, but every couple is different and the right arrangement is the one that works best for you and your partner. Whatever your solution, deciding what’s ‘yours’, ‘mine’ and ‘ours’ doesn’t have to be stressful. Here are three options for you to consider.

Merging finances

Pooling your resources may allow you to share financial burdens and both partners will have access in case of an emergency. In the event of a disparity in earnings, you can both enjoy a similar lifestyle, and many banks have better savings rates for higher balances. Also, paying shared expenses such as rent or mortgage are often easier to pay from a joint bank account.

Keeping separate finances

This approach often works for those who have different spending habits, for instance if one spouse is a spender and one is a saver. Keeping independent finances means financial independence – it can eliminate any disagreements over spending habits. However, you may find it is more difficult to keep track of joint payments and you won’t be able to access money in your partner’s account if there is an emergency. You should also bear in mind that you may not benefit from the higher savings rates achieved by pooling resources.

Partially merging finances

You may prefer to opt for a ‘best of both worlds’ approach, which means partners maintain their own accounts for personal spending. You could both contribute equally to the joint account and then keep what’s left over in your personal accounts. Some couples use a proportional system. For instance, if one partner earns two-thirds of the household income, they contribute to two-thirds of the joint account.

Things to consider

Any financial arrangement takes negotiation and planning. You could review your finances together and calculate your combined net worth to see where you stand financially as a couple. You and your partner may want to consider asking each other questions about your financial goals, your salary expectations, your assets, how much debt and how many credit cards you have, and whether you have retirement funds, savings and insurance. Honesty is key.

Free Financial Planning with HSBC HSBC can help you and your partner manage your money and develop a financial plan! Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and your financial ambitions. From there, we provide you with solutions on how to manage, grow and protect your savings to achieve your goals.

To make a free Financial Planning appointment visit www.hsbc.bm/planning or by calling 299-5959.

Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority.

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