Separate But Equal - Checking Accounts

As my kids grow up, graduate from college, get married and (finally) move out to make a life of their own, I want to give them some co-habitation financial advice that I wished that I had received when my wife and I were starting out. I want to give them my take on setting up checking accounts for themselves, so that money, hopefully, won't become a source of arguments in the future.

You and your "Significant Other" work hard for your money and deserve to have a piece of the pie to dispose of as you see fit. I recommend three checking accounts, all need to be maintenance fee free. One for you, one for him/her and a joint account for paying the household bills.

Why in the world, you may ask, do I need three? Each of you should have your own money, call it an "allowance", that you don't have to ask your spouse if it's okay to spend. That takes care of two of the three, the third one should be a joint checking account from which all household bills are paid.

As an example, you have diligently saved your "allowance" for a month and "Shoe Warehouse Grande" is having a sale. You should be able to, without a spousal conference, walk in to "Shoe Warehouse Grande" and buy those shiny black pumps you've had your eye on for the last three weeks. Likewise, your spouse should be able to buy the latest gaming console and the first person shooter that goes with it with their allowance.

The joint checking account is to pay the bills that you incur together, i.e. rent, power, cable, telephone, insurance, any furniture purchased together, etc. This account is handled differently than the first two. You should discuss everything that this account pays for and should make very few, if any, purchases from this account without first discussing it with your "Significant Other". You should set a limit on how much you can spend from the joint account without discussing it first. So, let’s say that the limit $50 dollars, but you truly need to make a purchase that is $100 dollars. A spousal discussion is required. Oh, and no getting around this rule by buying 5 things for $20 dollars each. This violates the spirit of the agreement with your “Significant Other”.

This advice does not change, if one of you stays at home full time with the children. I think it's even more important to have this arrangement in place, if one of you stays at home.