Merging finances as a couple can be quite overwhelming, whether you’re deciding to fully join your accounts, join them but keep some wiggle room or maintain two separate accounts. Luckily, First Hawaiian Bank has prepared some money management tips to make these decisions easier based on how your personal relationship is built.

Methods Involving Joint Bank Accounts

Choosing to join your finances is not a one-size-fits-all decision. There are many different methods that can work well for your particular relationship. Like in all aspects of your relationship, communication is key to deciding what works best, so be sure to choose a method you and your partner are both comfortable with.

1. Complete Joint Accounts 

Fully joint accounts for couples consist of one account in which both of your paychecks are deposited, and therefore all money is available to both partners. This method is known as complete commingling and means you will be merging all your finances into joint accounts, including all bank accounts, credit cards, investment funds, etc. This joint account option may not be right for everyone. Explore First Hawaiian Bank’s checking and savings accounts to see if complete commingling might be right for your relationship.

2. Joint Checking Account for Expenses

If you are comfortable making purchase decisions together, you may find it useful to have one checking account to share for major purchases. This frees up your personal checking accounts to be used independently. For this to work, both you and your partner will transfer equal portions of your separate checking accounts into one joint account on a scheduled basis. One way to make these transfers simpler is to set up automatic payments.

3. Proportional Method

The proportional method for joint accounts consists of both partners paying their bills at a rate proportional to their income. Household bills are shared but partners maintain separate accounts as well. This can make individual spending more equitable because instead of simply splitting the budget in half, your spending depends on your personal income. This is a great method for those who don’t like the pressure of matching what their partner is contributing or who aren’t able to contribute the same amount. However, be sure the higher-earning partner is comfortable with the idea of paying a larger amount and maintain open communication to prevent any feelings of resentment or unfairness.

4. Raw Contribution Method

The raw contribution method is the opposite of proportional, in which both partners pay the same amount without consideration of income. This approach is similar to the idea of having a roommate. It can prevent the higher-earning partner from feeling penalized for making more money and prevent the lower-earning partner from feeling marginalized for making less. This joint account method may also help bring up necessary conversations around how the budget will be affected if one partner loses his or her income altogether. 

Methods to Maintain Separate Accounts

For some couples, it works best to keep finances entirely separate. If money is a common point of contention between you and your partner, or if you enjoy having a sense of freedom with the income you earn, one of the following methods would probably work best for you. 

1. Using One Income to Fund Each Account

This method is a great way to save money toward long-term financial goals like buying a house or buying a car. With this approach, you and your partner will choose whose income you would like to use to fund your everyday checking account. If you choose the higher income to fund both your spending, this income will cover both partners’ purchases. Meanwhile, the partner with the lower income contributes his or her paycheck exclusively to your savings account. If the two of you are able to live off a single income, this is a great way to boost your savings. You can work together to decide if this works better as a long-term or short-term solution.

2. Mutual Savings Account

While the idea of maintaining entirely separate financial lives may be appealing, you can also opt for a method that allows shared purchases to remain a team effort. For instance, perhaps you and your loved one dream of strolling the beaches of Greece. An overseas vacation will likely require saving efforts from both partners, which may lead you to use a mutual savings account. With this savings account, you and your partner can both contribute toward joint goals but at the same time remain independent for all personal purchases. If you’re seeking financial privacy in your relationship but need an organized way to save for shared payments, this approach may be perfect for you. 

3. Everything Remains Separate 

If money causes tension in your relationship or you’d both rather spend and save independently, you can choose to keep your financial lives completely separate. This method works well for couples who prefer to keep money out of their relationship or have drastically different spending habits. 

The most important part of a relationship is open communication, and that pertains to your finances too. Determining which method is best suited for your relationship is a great way to build your connection and make it even stronger. For help setting up a joint bank account or identifying which solution is right for you, contact First Hawaiian Bank today. We can help couples navigate their finances together.