Deciding Whether a Joint Bank Account is Right For Your Marriage
Most married couples not only merge their lives together, they also merge their money after they tie the knot. This could mean a variety of matters, from sharing the responsibility for bill paying or combining their paychecks and paying off debt from one account. Many couples see a joint bank account as one of the most symbolic gestures of getting married and starting a life together.
However, while 76% of married couples state that they do share one bank account, this system isn’t always the best one for everyone. Compared to generations before, millennials are the least likely to want to share a bank account with their partner after marriage. Deciding whether you wish to combine finances after marriage is a priority, so weighing the pros and cons of each option is a great way to decide what you should do when it comes to your money.
Pros of Having a Joint Bank Account
Having a joint bank account allows both partners the opportunity to get to their cash when they need to. With a joint bank account, both partners will typically be provided with their own debit card and checkbook, as well as the ability to separately deposit and withdraw cash without the consent of the other. Many banks now offer online access to the account, making it that much simpler to complete financial tasks and pay bills. There are less financial surprises when married couple’s share bank accounts, as both individuals can see what is going in and heading out of the account. It also makes for easier checkbook balancing at the end of the month.Having a joint checking account also makes it easier for an individual if their partner passes away. The surviving spouse will have immediate access to the funds without having to find a will or deal with the current legal system to get access to the money. Many surviving spouses must go through a lengthy legal process in order to claim any money found in a separate account.
A lot of married couple’s also like to combine credit cards and charge accounts as well. Although not as much of a necessity as a regular checking account, often this can be a great fix if your spouse doesn’t have the credit lines you do and you want to help them out. By allowing for an authorized user or putting your wife on your charge account, the entire history of that account will now show up on their credit reports as well. This can be a good thing or bad thing and does require a great amount of trust. If you trust your partner, then by all means. Combining finances can be an awesome thing. As both parties contribute, you then start to create a savings account and start working on your nest eggs and investing to make even more money for retirement. Its never too early to start planning for retirement.
Cons of Having a Joint Bank Account
Many couples dislike the feeling they get when they have a joint banking account with their spouse, as they often feel a loss of financial freedom when combining finances with their partner. Separate accounts allow both partners a sense of financial freedom when it comes to how they manage their money.
There are drawbacks to sharing an account with your significant other. If one spouse isn’t effectively communicating with the other about their spending habits, problems can quickly arise. Additionally, some spouses enter the marriage with significant debt, such as child support payments, alimony, credit card debt and student loans. If this debt is being paid out of a joint account, the other spouse may start to feel resentment about being responsible for this debt.
Joint accounts can also quickly become a problem if the relationship comes to an end. With a shared account, one spouse can drain the account without the permission or knowledge of the other, leaving that person penniless. A separate account will prevent this scenario from happening and provide a sense of comfort for each party. A separate bank account will also make it easier to separate finances after a break-up or divorce.
Communication is key when sharing accounts. Both partners have to be open and both have to watch spending aggressively. If one partner starts to take advantage of the accounts you have together, it can become very exhausting and hard to deal with. Money switches hands, no answers, bills start to become past due, depression, so on and so forth. These types of decisions take time and always go with your gut feeling. If your not ready yet, then don’t do it.
Financial Goals
Whether you decide to establish a joint account after marriage or are happy to keep them separate, it is always in the best interest of each party to speak together about future financial goals. Talk with your spouse regularly about financial matters to make sure you are both on the same page when it comes to budgeting your money and your individual spending habits.
