The Three-Account System for People Sparing Finances

It’s virtually inevitable that, at some point in your life, you will share bank accounts and financial responsibility with another person. With the likelihood of shared finances being extremely high, so are the chances of confusion and personal conflict.

In fact, many marriage counsellors would tell you that a high percentage of marriages experience financial conflict, most of the time related to debt. The three-account system works just as well as the two-account system, but is designed to help two people control spending and protect discretionary income. In fact, it’ll go a long way to eliminate fights, power struggles, and accidental overspending.

To implement the three-account system, divide the variable expenses according to the person who is typically in charge of them, and place them in a separate account for each person.



For example, my wife is in charge of the groceries, the kids’ clothes, and the gifts for our friends. The total of these variable expenses adds up to $750 per month. This amount, in turn, is deposited into an account my wife is in charge of. Likewise, I’m in charge of the family’s entertainment budget and dining out. The total of these variable expenses is $250 per month, and is deposited into an account that I’m in charge of.

The balance of our money remains in our fixed account. While we do not pay every bill together, nothing additional gets spent out of this account that is not agreed upon in advance. We make joint decisions about the discretionary income and whether it is used to pay down debt or on other expenses.

Just like the two-account system, each person in the relationship can spend his or her account down to zero each month. When each person hits zero, if more money is needed, it has to be agreed upon by both parties. Additionally, if one person is able to minimize the variable costs he or she is in charge of without it affecting the household that person is free to spend the balance of the money as he or she sees fit. This is often the case with my own wife and grocery coupons, and provides her with some great incentive to be frugal in our choices.

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