Joint or separate finances?

Portrait of a young Maori family taken outdoors

As relationships progress, there may come a time when you need to manage joint money. 

This can happen when you decide to live together, income earnings decrease or increase, or you need to take time off from work to look after children or study. Either way, it is unlikely that two people spending their own money and doing their own tasks within a relationship is going to work well in the long term.

Research suggests there can be value in couples having their own money for discretionary spending, as well as a joint fund for shared expenses. 

How this is decided will be specific to the individual and collective needs of your particular relationship. 

When deciding you should think about: how much income each partner earns, what are the other household contributions, if there are any existing financial commitments and so on.

Regardless of how things are calculated there is a need for each person to feel a sense of autonomy over their own financial lives, while still maintaining a transparent and open approach to the management of the household finances.

Things to consider:

Ownership
Who has access to assets and income?
Management
Who balances the accounts, manages investments, figures out taxes, makes a budget or pay bills?
Decision-making
Who decides how the money is earned and where the money goes - including daily costs, unusual expenses, investments and giving.
Access
Do you both need to access household money? Is discretionary money different or kept separate?
Accountability
How do you keep each other focused and responsible for your financial plan?
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  1. Ownership – who has access to assets and income?
  2. Management – who balances the accounts, oversees investments, figures out taxes, makes budgets, pays bills?
  3. Decision ­making – who decides how the money is earned and where the money goes, including daily costs, unusual expenses, investments, and giving?
  4. Access – Do both parties need to access household money, and is discretionary money different or kept separate?
  5. Accountability – how do you keep each other focused and responsible for your financial plan?

Bank accounts

There are pros and cons to separate and joint bank accounts. 

Your own account is owned solely by you and can only be accessed by you. Separate accounts provide more control and autonomy, however in relationships they may create a sense of inequality, especially if one partner is secretive with spending. 

A joint account is shared by you both. You both have equal access to all of the money in the account and are equally liable for any debt. Joint accounts may promote equality and shared control, however if one person takes all the responsibility for managing the account there may be an increased risk of financial abuse.

Having both allows you to pool resources. It also helps you plan which expenses will be shared, and how much money will be left over for you to spend however you like. 

It’s also important to note that having separate bank accounts does not necessarily mean that money remains separate if the relationship was to end. From a legal perspective, like other assets, money can be considered ‘relationship property.’

Assets

When you are in a relationship, assets and money that you consider your own may still be treated as relationship property by the Property Relationships Act.

Regardless of whether couples combine their incomes or assets, it is good to discuss the topic, especially if there is a shift in a person’s income or if one person feels unhappy about the ownership structure of assets.

When it comes to assets, having things (the family home, family trust, investments etc.) in only one name can be an issue for the other partner. How asset ownership is set up in a relationship can affect an individual’s sense of equality and power. If you are feeling unsure about these things, below are some suggested ways you could frame a conversation.

If you are feeling unsure about these things, below are some suggested ways to frame a conversation:

As your life begins to merge with your partner, it’s important to discuss your money moving forward. Joint accounts and financial management might not be the right option for you – but ultimately, the decision to combine or keep finances separate is a joint one. 

Community Law has further information about relationship property that may help with planning and decision-making.

© Good Shepherd NZ and AUT, 2021

Good Shepherd NZ has built this toolkit in collaboration with Dr Ayesha Scott of AUT’s Finance Department.