Many couples operate using one household bank account for all purposes. Into this one account both route their paychecks. Out of this one account, they pay for all joint and individual bills along with any impulse purchases each may make. They do this by each carrying a separate checkbook for this account, each writing checks or using an ATM for cash and (hopefully) recording these purchases in separate check registers. Many couples also operate in a similar way with jointly held credit cards. Unfortunately, this approach is often an unmitigated disaster.

The main reason is the difficulty of keeping a running balance of the money going out and coming into a bank account or credit card when two people are using it both while they're together and when they're apart. Even with good communication by the partners, it's a system fraught with potential errors and omissions.

His, Hers, and Ours

When applied to household money management, the “his, hers, and ours” approach calls for two separate joint checking accounts, ideally both free of checking fees with a low or no minimum balance requirement. Each partner has primary responsibility for writing checks and balancing one of these two accounts, although legal ownership of the two accounts would reside with both partners in the event access to an account was necessary without the other being present.

This approach limits the amount of ongoing coordination between the two but requires more advance planning. The two partners agree to designate certain incoming monies to go into each checking account. The primary account holder of those accounts would then be responsible for paying certain bills. One pays the mortgage, the other pays the babysitter, and so on. With this arrangement, there is shared responsibility with each focused on different incoming and outgoing monies. Each partner also must balance his own checkbook. At regular meetings, the two review spending and make any necessary adjustments.

The Point of “Pin Money”

This expression originally signified the money given by a husband (who made all the money and spent it, too) to his wife for small personal expenditures such as pins, which were very costly items in centuries past. Today, it refers also to small amounts of money given to anyone — for instance, a spouse, children, or an employee — for incidental expenses over which the users have discretion and thus do not need prior approval to spend on a given item.

This idea can come into play when spouses are using either a one-pot or two-pot system of money management. If possible within either system, it is often a good idea to give each partner some discretionary money from the common funds so that a couple's joining together of financial resources doesn't rob each of a feeling of autonomy within the marriage.

Not having separate discretionary monies available to both partners can lead to tensions and fights, especially when one partner makes solo purchasing decisions and doesn't tell her partner. If she keeps such purchases secret, there is the risk of undermining trust within the relationship. By agreeing to have separate discretionary accounts, a husband and wife are not saying that it's okay to have either of them make major spending decisions autonomously. This plan simply gives both some individual spending prerogatives. Think of it as breathing room.