Deciding on a joint bank account with anyone, regardless of their close relationship to you, requires a sound think-through of the consequences for both of you.
Realize the drawbacks of having a joined bank account.
- With a combined bank account, some couples may experience a loss of financial freedom.
- When partners don’t communicate about their account activities, or worse, hide financial secrets, owning a joint bank account can cause problems in a relationship.
- When one partner in a relationship has unpaid debt, such as school loan debt, credit card debt, or even child support, problems might occur. A creditor may attempt to recover funds from a shared bank account if one of the account holders owes money.
- When a relationship ends, having a joint account can be an issue. The funds in a joint account can be difficult to divide if the couple decides to split up. Each partner has the legal authority to take money out of the account and close it without the other’s agreement, and one party can easily leave the other penniless.
Realize the advantages of having a joined bank account.
- With separate accounts, each couple has control over their finances to a greater or lesser extent. In other words, because transactions are private rather than shared, there is no “checking up” from the other partner.
- Separate bank accounts prevent a scenario where one partner ‘takes the money and runs’ and can allow for an easier break that often doesn’t involve a long fight to fully separate the finances.
Talk to your partner about opening a joint bank account. Regularly discussing finances and working on a strategy will help you and your partner build a solid financial foundation. Couples who examine their decision on a regular basis to ensure that their method is still working for them may also be successful.
Discuss separate bank accounts with your partner. Financial obligation does not disappear for either partner if you opt to establish separate bank accounts. You’ll still need to figure out how you’ll pay your bills, who’ll be responsible for which payments, and have regular meetings to reconcile your accounts and finances. You may still want to preserve one or two joint accounts to save for specific financial goals such as buying a house together.
Think about financial goals. Committed partners can have their own accounts while also opening a joint account in which they deposit a portion of their income that they agree on. This way, you may both profit from a joint account while still keeping your financial freedom. Couples can also have separate checking accounts and open a joint savings account for vacations, a down payment on a home, college tuition for their children, or retirement.
Talk about how you’re going to pay bills. A joint bank account works the same way as a regular bank account, but more than one person has access to it. Every person listed on a joint account can deposit or withdraw funds from it, which can be convenient for paying shared bills. If it’s convenient for you and your partner or spouse, create a joint account, but retain separate accounts as well. If you don’t already have a separate bank account, you and your spouse should have a discussion about obtaining one.
Think about the ‘rules’ of a shared bank account. There are two or more owners on all joint bank accounts. Each owner has complete control over the account’s funds, including the ability to withdraw, deposit, and otherwise manage them. While some banks may designate one individual as the primary account holder, everyone owns everything—all at the same time.
- Your combined bills should be split up according to your earnings. To estimate the amount each person should contribute toward combined expenses, add up your and your partner’s take-home salary and see what proportion you each bring in.
Consider your relationship’s commitment. Married couples have traditionally opened joint bank accounts. A joint bank account can be opened by anyone, not just married couples. Civil partners, living-together unmarried couples, housemates, older adults and their caregivers, and parents and their children can all open joint bank accounts.
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