The Importance of Bank Consolidation

Yesterday’s comment by Lulu got me thinking about my family’s choice to consolidate bank accounts. When I first got married my husband and I kept separate bank accounts. I was proud of the little brokerage account I first started in college, and even prouder of the $30,000 I had accumulated from summer jobs and year round internships. Shortly after we were married my husband raised the question of closing our individual accounts in order to open a joint one. I immediately said no. I was attached to my account. I knew the account number by heart. I had my own checkbook. I saw absolutely no reason for consolidation.

But as time progressed I changed my mind for a couple of simple reasons. First, over the years we have opened a number of other accounts, eleven to be exact. There is my Roth IRA, non-deductible IRA, mixed 401(k) – Roth & Traditional. Then there is my husband’s non-deductible IRA, Roth IRA, Traditional IRA & a mixed 401(k) – Roth & Traditional. It is often difficult to keep track of all of these accounts especially when attempting to balance our allocations. In an effort to make our lives just a little bit easier we ultimately decided to consolidate the only accounts we could: those for checking and saving.

The second reason for bank account consolidation: building a future. By keeping all of the money in one pot, each spouse knows exactly how much money is available. After all, although my husband and I make individual purchases the majority of our spending is for joint ventures, everything from home and car repairs to family vacations. A side benefit of a joint account: I am less likely to splurge on an item. This certainly doesn’t mean that I don’t buy things, just that I often think twice before making a purchase. I believe this alone helps our family save a good deal of money.

Third, as you may have read from my previous post I think a joint account makes spouses more accountable to one another and less likely to keep secrets. Although you may love and trust your spouse, as I do, it never hurts to ensure that they are not unknowingly spending money. How many times have you heard a wife say her husband was spending money on another woman? Why didn’t the wife know about this until after the fact. With a joint account, where paychecks are directly deposited and bills are paid online this simply cannot happen. Of course, having a joint account does not guarantee one spouse will not embezzle money from another. After all, if a husband or wife doesn’t keep tabs on the joint account it is no different than if the spouse banks independently. In fact, I wholeheartedly believe joint bank accounts have increased the strength and trust in my relationship with my husband.

Don’t get me wrong giving up my individual bank account wasn’t easy, but the end I believe it has strengthened my marriage and my portfolio.

2 thoughts on “The Importance of Bank Consolidation”

  1. We have joint accounts for our home and investment property loans, and a joint savings account where we put money that is needed to service our joint payments. But we’ve also kept our individual accounts – we’re still individuals, and as responsible adults can make our own decisions on what we choose to spend our own money on. In any case we tend to consult on any big expenses anyhow. This probably seems more natural to us because we didn’t meet and marry until our late 30s, by which time we already had our own investment portfolios, retirement savings and so on.

    I don’t see that having only a joint account is much help avoiding infidelity – your spouse would have been unfaithful in a flirting/dating sense well before they start spending noticeable amounts of money on gifts etc. By the time these items appeared obviously in a joint account statement then it’s probably a round about way of saying they want to be found out and split up. If your partner wanted to conduct a clandestine affair they’d just take out regular small amounts of cash and use that for any gifts etc.

    On the simplification side of things, it’s really not an issue now that most accounts can easily be tracked via the internet. The only reason to avoid having lots of extra accounts is if they are costing you money eg. account keeping fees etc.


  2. First, of course married couples are individuals, who can choose how to spend their own money, but I don’t understand why you need a separate bank account to demonstrate self worth.

    Second, although it’s true that a spouse could cheat without spending money, it crosses a whole different line when they start tapping into family funds.

    Third, joint accounts definitely simplify our lives. For example, our brokerage firm enables us to create on the spot asset allocation reports, which allow us to visualize the breakdown of our holdings by asset class (large cap, small cap, international, etc). If we maintained separate accounts we certainly wouldn’t be able to generate these reports so easily and would have to perform a lot of extra work to receive comparable results.

    Lastly — loved the comment, I love it when readers disagree with my posts.


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