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The three-account model: The simplest way for couples to organise their finances

Published May 4, 2021

My money, your money, our money: how can couples organise their joint finances in a way that is both easy and transparent? With the simple three-account model. Read on to find out how it works. 

The subject of money can often lead to arguments in relationships. Especially once you start living together and have lost track of who paid for the last weekly shop or household bills or aren’t really sure whether you’re both paying your fair share. And if you decide to start a family, things can soon get very confusing if you don’t have a joint money management strategy in place. But it doesn't have to be that way. 

Most stress can be avoided by drawing up a plan for your joint finances. And doing that is neither complicated nor does it take all that long. The three-account model is the simplest and clearest option. 

How to draw up a plan for your finances – with the three-account model

The first step is to sit down together and make a list of the fixed costs that you regularly have to pay together, i.e. rent/mortgage, utility bills, grocery shopping etc. The total amount is the household budget that you will need each month. 

And then look at the variable costs you have together: i.e. for joint holidays, plants for your garden or balcony, gifts for family and friends etc.

Once you know how high your joint monthly expenses are, you can start organising your accounts. A simple option is the three-account model, which is practical, clear and easy to explain: 

basically, each partner keeps their own current account and, as a couple, you also set up a joint account that you use together

But which money goes where? There are different ways to organise your joint finances with the three-account model. Here are two examples:

Variant 1: We share all costs together and split everything 50/50

All income from both partners, regardless of how much each of you earn, is paid into the joint account every month by standing order. This money is used to cover all your joint outgoings: from the rent/mortgage to utility bills and loans or joint holidays or pension provisions.

And everything that is left at the end of the month is divided in half and transferred back to each partner’s own current account. From this money, each of you then pay for your personal outgoings: from new clothes to nights out, for example. Or you set some of the money aside for bigger purchases or projects. Another option that also makes a lot of sense: you both save a certain amount of money each month in your joint account. This will give you the security of a financial buffer in case your washing machine or fridge ever breaks down – and we all know that things like that usually happen when we can least afford it. 

Variant 2: We share all our expenses proportionally, based on income

This is where you contribute an amount that is proportionate to your earnings: work out how much of a monthly budget you need and how much each of you earn. And then calculate the percentage of money that you should each contribute to your joint monthly costs. Whoever earns more will pay more into the joint account, from which all joint costs will be deducted.

In your individual current accounts, you will be left with the amount remaining after each partner has paid their proportion every month. From this total, you each cover your own personal expenses.

But this option also requires you to think about how you deal with savings and reserves. Will you each build up your own savings, or do you want to save together in your joint account? 

Which variation of the three-account model is suitable for us?

The option that is right for you and that you think is fair is up to you as individuals and can be different for everyone. But it’s important that you decide on one together and that you’re both happy with your final choice. If you’re unsure, then why not try out one option and review it after a few months? And if you see that it’s not working, just try another one.

Regardless of what you choose: a three-account model actually makes a lot of sense. It is clear, transparent and fair because you are taking joint responsibility for your joint costs – and you don’t have to question whether you have both paid an equal amount at the end of every month. This reduces the potential for money-related conflict and makes things clear from the outset: you are taking joint responsibility for your shared expenses, but still have your own accounts to keep your individual finances separate. And that is also important. 

Would you like even more information on how to tackle the subject of finances in your relationship? Look no further:

Here you will find the most important money-related questions that you and your other half should be asking each other. 

In our Short Guide we have listed a brief overview of all key points related to the subject of joint finances.

And here we show you how to get your monthly budget under control if you are regularly overspending and want to do something about it. 

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