Finances and Accountability?

If a husband and wife are working hard to get out of debt, what level of accountability should the couple have to each other with their spending? Is it o.k. to spend $200.00 without first consulting the spouse? What is the golden amount that each couple should be accountable to each other for? $50.00, $100.00, $500.00?

I've worked at a major bank for 4 years and saw many couples arguing over finances. The best practice I've seen employed by many smart couples is to have 3 accounts. One main household account is where the direct deposits go to and all of the bills are paid out of. It doesn't even need a debit card, unless one of your bills has to be paid with a card.

The other two accounts are individual spending accounts for each spouse. They get a debit card and a monthly allowance to be automatically transferred after every paycheck. The amount you'll have to decide based on your individual finances. Make sure the payments are made and you are setting at least a little bit into a joint savings account, you can split up the rest. I'd say a number between $100 and $200 per person per month is very reasonable.

So this way, if the husband wants to buy a new TV for $500, he just needs to save up this much in his account and doesn't have to ask the wife. If a wife wants to buy designer shoes for $400, she does the same. Everyone is afforded their freedom and you are not telling each other what to do (just try and reason with someone that something they LOVE and MUST HAVE is not worth the money...). You can't guilt trip each other into buying something (like "you bought those ridiculous shoes for $300 last month and now I can't afford this titanium golf club?").

This also eliminates possible overdraft fees because if your joint account runs pretty low from the bills and you both buy something for not very much, but don't inform each other right away, you could overspend the account. I never recommend having two people with debit cards using the same account, unless they always leave quite a bit of a buffer in there, agree on daily spending limits, and reconcile all activity at the end of the day.

Hope this helps. E-mail me if you have more questions.