Suze Orman Says Couples Shouldn't Bank Together. Here's Why
- Some couples like to do everything together -- including banking.
- Going that route is a mistake you might regret.
There are certain aspects of your life you may want to keep separate.
There are different types of couples you might encounter. Some are wrapped up in each other and do everything together, and others prefer to maintain more independent lives. Even if you happen to fall into the former camp, you may want to proceed with caution when it comes to one aspect of your relationship -- banking.
A lot of people open a joint checking and savings account once they couple up. But financial guru Suze Orman insists that doing so could end up backfiring on you. And that's advice worth taking to heart.
The problem with joint banking
When you combine all of your finances with a romantic partner's, you lose a certain amount of financial freedom and independence. And Orman cautions that that can be a dangerous thing.
In fact, in a NextAdvisor interview, Orman was quoted as saying, "I would never, ever have just one joint account, and that's it. Never, ever, ever."
Orman and her wife KT have been together for a good 20 years. Yet Orman insists that they've never opened a bank account together. She also says that a joint account could lead to power imbalances. And if a relationship goes sour, having money tied up in a joint account can make things a lot more complicated.
Not totally separated
Notice that Orman says it's a bad idea to have just one joint bank account. But she's not necessarily opposed to having a joint account with a partner plus separate accounts. In fact, that arrangement might end up being a good solution for you.
Let's say you and your partner share a home, and as such, you split the cost of everything from food to utilities to your monthly mortgage payments. In that case, it could pay to open a joint account that you both contribute to on a monthly basis, and use that account to pay the bills you're both responsible for.
But in addition to that joint account, Orman says you and your partner should each maintain a separate account. That way, you have money of your own to spend, save, and manage as you please.
Now in this situation, you'll need to sit down with your partner to think about how to fairly fund that joint account. You may decide you'll each put half of your income into it, even if you earn very different salaries. Or, you may decide that you'll each put $3,000 a month into that joint account -- even if one of you only brings home $3,400 a month and the other brings home $5,200.
From there, you'll also need to set ground rules on what that account will be used for. It's a good idea to write up a list of bills that get paid from your joint account so there's no confusion.
There are different options you can explore, so you'll need to sit down and talk things through. But all told, Orman is a firm believer that it's important to have some amount of money in your own name. So if you're going to go the joint account route, just don't make it your only bank account.
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