You might be wondering if it’s a good time to set up a joint bank account. Maybe you’re getting ready to tie the knot or finally consolidate your money with your spouse. There are many benefits to having a joint bank account, but is it the best option for your situation?
Pros of Opening a Joint Account
There are many benefits to having a joint bank account with your significant other, such as linking bills to share the cost of a household, easy budgeting and quick access to your funds.
It’s Easier to Pay Bills
If you’re having trouble keeping track of paying bills, it might be time to start a joint bank account. Your spouse may have already paid a bill that you don’t know about, or he or she might have forgotten to pay a bill. It’s harder to keep track of payments without a joint bank account.
By consolidating your finances, you’ll be able to track and schedule bill payments – no more wondering if you’ve paid the electric bill!
You Only Have One Account to Track
Besides paying bills, joint bank accounts are a great way to track all of your finances. You won’t have to guess how much your wife spent at the grocery store last weekend; you’ll be able to see the exact amount. You and your significant other will be able to know, at all times, exactly how much money you have.
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Save Time and Money
Having a joint bank account lets you and your significant other learn to save money together. The account can be a great way to keep each other in check, especially if you have budgeting goals you’re aiming to achieve. You’ll save time by only having one account to stay on top of, as opposed to multiple accounts.
This one might sound obvious, but having a joint bank account means having only one password to remember. It’s also easier to budget the money if it’s all in one place. You can account for upcoming expenses and the amount coming in and out.
Having a joint account with easy access means you have full transparency with the person you’re sharing the account with.
Perhaps the best reason to consolidate your money and open a joint bank account is to build trust. If you’re planning on making long-term financial goals, having a joint bank account might be for you.
So, Why Shouldn’t You Have a Joint Account?
Now that you’ve read about the benefits of joint bank accounts, it’s important to consider the downsides before jumping in headfirst.
No More Financial Independence
Having a joint account with your loved one means no more unchecked financial freedom. Because your significant other can look at your spending habits all the time, you lose the ability to freely spend money how you choose.
Keeping Track of Money Flow
Having accounts joined means having more money to manage. You and your significant other will have more money coming in – possibly two paychecks – and likely more bills you’re responsible for. Having one account means having to be more organized.
It also might be hard to agree on how to spend the money. Two people are sharing the account, which means there are now two people who have opinions on how to use the finances. A joint bank account may not be a good idea if both parties have very different ideas on how to spend money.
Joint bank accounts can become very messy if you end things with your partner. According to Jeremy Vohwinkle from The Balance, each person has every right to withdraw money and close the account without the consent of the other. When you have assets together, splitting the account can become tricky.
What’s the Best Option for Me?
Before committing to a joint bank account, have an in-depth conversation with your significant other. Be honest and open about your financial goals and hopes for budgeting. It’s also a good idea to discuss what potential debt or loans you could be bringing into the relationship.
The bottom line: Make sure you know what you’re getting into before signing on the dotted line.
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