We’ve all had the family finances talk and we’re still alive right?  Good lets move onto one aspect of our finances that affects all of us.

Joint bank accounts!

Setting up joint accounts are important but so is having individual accounts so each of us still retains a bit of financial independence.

The following is how my wife and I set up our bank accounts: We try to split our expenses evenly but this may not be possible for everyone.

Day-to-day banking

Before we got married we used different banks but after getting married it just made more sense to use a single bank.  We settled on a bank that made sense for the both of us.

Individual accounts: We each have one of these which act as our personal accounts, this is where our paycheques are deposited. I personally think it’s important to maintain individual accounts so each partner keeps some financial independence.

Joint account: All of our major expenses get paid from this account.  Since we have a budget set up we each know exactly how much we need to deposit in here from our personal account to make sure all our bills get paid.

Since all of the above accounts require us to maintain a minimum balance to get monthly fees waived we view that money as our “emergency fund”. Many banks offer various perks if you use certain accounts e.g. a free premium credit card and free safety deposit box so we take advantage of all those offers.

joint bank accounts

Short to long-term savings

We use an online bank for short to long-term savings. Higher interest rates are a huge draw plus you can setup the accounts whichever way you like. We like to use these accounts to save for things like car maintenance, vacations, and presents.

Using multiple accounts is a great way for people to visually see where their money is going, it can also help you budget for your various expenses.

Long term savings

Registered Retirement Savings Plan (RRSP): We both take advantage of our RRSPs. This was one of the first things I set up when I joined the working force and it was one of the best decisions I ever made. I admit that I started with mutual funds but since then I’ve transitioned to index funds and have become a do-it-yourself investor.

Tax Free Savings Account (TFSA): I like to use my TFSA as an extension of my retirement savings. Due to my pension adjustment, I have limited contribution room in my RRSP so I use my TFSA for “retirement savings” now. Sure I need to pay taxes now but having my investments grow tax free is a real incentive.

We do treat our TFSAs as individual accounts but at the same time, some of the investments are joint things. Some of the funds in our TFSA are for short-term purposes but a majority of them are meant for retirement.

Final thoughts
Again there is no right or wrong way to set up joint bank accounts just figure out a system that works for you. We personally budget everything so having all these accounts set up just makes things a lot easier for us.  At the end of the month if all the bills are paid and our savings goals are met then it really doesn’t matter how we spend what’s leftover.

2 Comments

  1. Grrlguide on March 20, 2014 at 7:51 pm

    I have had these conversations with many of my married friends, and everyone comes up with different choices. For my husband and I, everything is pooled into a single bank account. I manage everything but before anything unusual we discuss. It works because neither of us has needs or interests that the other considers excessive or needs to be separated. I know this isn’t for everyone but it works for us because our approaches to money and spending are so closely aligned.

  2. Barry C. on March 20, 2014 at 8:34 pm

    @Grrlguide

    If you have a system that works that’s all that really matters. The one thing I do recommend is to make sure both partners know how the accounts are set up in case of an emergency.

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