March 07, 2019
There is new research that says couples that only have a joint bank account are happier than couples that keep some, or all of their money separate. It showed that the joint bankers had a lower divorce rate than the other couples.
That’s indeed interesting, but I think it may be a dangerous message to send.
A separate bank account is what makes it easier to leave a bad situation. I hope you never find yourself in an abusive relationship, but through my work with the National Domestic Violence Hotline, I know that so many women find themselves struggling to leave an abusive relationship, because they are a victim of financial abuse: they don’t have access or control of any money.
I pray that none of you ever find yourself in an abusive relationship, but a separate bank account is smart insurance, just in case. If you enter a relationship with a separate account, great! Add a joint account if that works for you, but keep your separate one. If you don’t have a separate account, you and your partner should have an open discussion that each of you will add separate accounts. If your partner balks, take that as a potential warning sign of money control issues. Don’t get mad, but keep talking. And ultimately, you need to stand in the truth that having your own account is an important right.
A separate bank account should not be something you ever need to hide from someone, but you know what’s best. If you know having your own account is going to be a problem, consider some workarounds. If you open an account and sign up for e-delivery of statements (and tell the bank you don’t want any marketing material) you can eliminate statements showing up in your mailbox at home.
But if you need to go this route, I also hope you are strong and confident that you deserve better, and will seek out help. You can start by hearing how other women managed to move forward in a series of conversations I conducted with The National Domestic Violence Hotline.
And for those of you in a great marriage, with joint and separate accounts, I have a question for you: Do you also have your own IRA account that you are contributing to each year?
It doesn’t matter if you currently aren’t earning an income. If you are married you are entitled to a Spousal IRA. All that matters is that your household has earnings that are at least equal to what you contribute to an IRA. So let’s say you are married and you each want to fund a Roth IRA up to the $6,000 limit this year. ($7,000 per person if you are at least 50 years old.) If your household income is at least $12,000 you both can fund a $6,000 IRA. Do it. Now!
Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.