Money is one of the primary causes of divorce or separation in America, so if you’re in a long-term, committed relationship with someone, there are a lot of things to consider before you decide to have a joint account. We’re not saying that sharing a checking account with your significant other will cause problems in your relationship, but it could if both of you don’t set budgets and goals and stick to them. There are pros and cons to having joint checking accounts, and there are pros and cons to maintaining your own separate accounts, so now you need to figure out which option best fits you and your partner’s preferences.
Pros of Joint Accounts
There are some tempting benefits that come with sharing a checking account, especially if you and your significant other are living together. Keeping all of your money in one place will make paying rent and bills easier, plus if you want to put a down payment on a condo rental in Destin, you don’t have to worry about one of you paying it all and the other paying that person back. Also, sharing an account with more money in it means that you should have to pay fewer fees to keep the account open. Holding only one checking account will also make budgeting and grocery shopping more simple because you won’t have to calculate and divide up all of your expenses. Particularly if you and your significant other don’t make the same amount of money, both of you will still be able to live a comfortable lifestyle with each other’s help. Both of you will have a debit card attached to the joint account, which means that you don’t have to share one card and end up stranded without access to your account.
Cons of Joint Accounts
It is probably not a smart idea to open a joint account with a person who you haven’t known for very long because you both need to trust each other wholeheartedly for it to work. Trust takes time to build, so make sure that you know your significant other well enough to trust them with your money. Another aspect to take into account (no pun intended) before you go down to the bank together is that you will have little to no privacy when it comes to your spending habits. So, if you don’t tell your partner that you’ve been having to pull hundreds of dollars out of your savings account to pay off your credit card each month, they’ll know that if you have a joint account. Be upfront and honest with your partner if you’re having any monetary struggles, and perhaps you can work on them together. Or, you can keep a separate account for a while until you gain the confidence in yourself to handle both of your money.
Types of Joint Accounts
If you do choose to go with a joint account, you have a few options when it comes to types of checking accounts. There are basic accounts (which sometimes have a fee), free checking accounts (no monthly fees), and checking accounts with interest (which let you earn a small amount each month). Talk to your partner and decide which account is best for both of you. The basic account is great for those who only use it for bills, the free checking account is the most popular for everyday use, and the checking account with interest is for those who can afford to keep a high monthly balance in their account at all times.
Pros of Separate Checking Accounts
The primary benefit of keeping separate checking accounts is that you don’t have to worry about your partner spending all of your hard-earned money, and if you happen to break up, you don’t have to worry about messily dividing up your money.
Cons of Separate Checking Accounts
It’s definitely less risky to keep your own separate checking accounts, but don’t get the impression that this move will eliminate all conflict from your relationship. What if all the bills come out of one partner’s account and the other partner keeps forgetting to pay them back for their share? Or, the balance of who pays for what in the relationship, like going to the movies or out to eat, could become uneven if one person consistently pays for more than the other.
The Middle Ground
One solution that many couples have had success with is keeping their own separate checking accounts and opening up a new joint account for joint expenses. This way, you can still maintain control of your own money, but you and your partner can also work together to save up money and pay bills. For example, you can open a new account that is strictly for rent, bills, and groceries and then keep the rest of your money in your own accounts. Or, you can open a joint savings account to save up for a new car or house and maintain your separate accounts for everyday expenses.