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Why married millennials are skipping the joint bank account

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What if you fall in love with someone who has a vastly different approach to money? For example, you are a good saver yet your partner loves to spend money.

Or you love to shop and your partner doesn't want to part with a cent.

Not all couples have the same approach to money. But they often get around it because the rest of the relationship works.

When couples buy a property or have kids, traditionally they merge their incomes and set up a joint bank account. But this is changing as an increasing number opt for separate accounts even if they have children.

super questions shared finances

A new survey from St.George of 1500 parents around Australia found that around 40% of couples with kids keep separate accounts. It found that only half (51%) of families combine their income.

The survey doesn't give any insights into why people keep their finances separate.

One theory is that they prefer the freedom of keeping their own money to spend how they wish. As well, detached accounts help keep finances simple in case the relationship ends.

In the case of blended families, some partners don't want to share their income with their partner's children from an earlier relationship, pay child support or support their partner's elderly parents.

Millennials (born in the early 1980s) are keeping their accounts separate more than their parents. It ensures that they aren't paying their spouse's student loans or credit card debts.

One way to keep finances separate and working well is to agree on who pays for what. For example, one person may cover the day-to-day living costs while the other pays the school fees, with both contributing to the mortgage.

Of course, where one person earns much more than the other the situation becomes complicated.

As well as keeping separate finances, the survey found that couples keep secret accounts. This can be a practical strategy.

I have a friend whose husband doesn't know how much she spends on clothes and shoes because she keeps a special bank account to fund them. This makes for a harmonious marriage.

She isn't alone.

One in four parents said they keep a financial secret from their other half.

The top four secrets are a bank account (23%), a large debt (22%), an expensive purchase (21%) and a credit card (16%). For mums the top secret is a large debt while for dads it's a bank account.

Six in every 10 households rely on only one parent to manage the money and they typically agree that one of them is a spender and the other is a saver. When it comes to the household budget, only four in 10 parents approach it as a joint responsibility.

It is best to minimise conflict over money in a relationship but this isn't always easy. One in four families find money a source of conflict.

Around 40% of them believe this is due to their partner overspending. But there is also plenty of stress about income, food costs and utility bills.

But take heart. As you get older, your financial situation appears to improve.

For example, 70% of those 55 and over said they were savers, compared with 57% of those 35 and under.

Pros and cons of a joint bank account

One of the benefits of a joint bank account is that you can both see what is coming in and going out. Transparency ensures that there is a smaller chance of financial surprises, such as big withdrawals.

A joint account also makes it easier to keep track of spending.

There will be joint bills that you have to pay. A joint account can make this more straightforward than always having to discuss who is going to pay for what.

Your legal affairs can also be easier with a joint bank account. For example, if one spouse dies, the other will be able to access the funds without having to go through the slow process of referring to the will or the legal system to claim the money.

One of the downsides of a joint account, however, is that if the relationship deteriorates and your spouse withdraws money, there is nothing you can do about it and it can be hard to get it back.

Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
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