3 Questions to Ask Your Partner Before Opening a Joint Bank Account
My husband and I were married for many years before we finally opened a joint checking account together. It was just more convenient for us to maintain our separate accounts and divide up the bills.
Eventually, though, we had more shared financial goals and more things we were working toward together. So we opted to move all of our money into a joint account. This has been the right decision for us, but it's not necessarily the best choice for everyone.
Before you open a joint bank account with your partner, here are three questions to ask to make sure the decision doesn't lead to financial or relationship disasters.
1. Will we put all of our money into the joint account?
The first thing to think about is whether you will put all of your money into your joint account, or whether you will each deposit some and keep some of your own. Both options can work, but there are pros and cons for each.
Putting all your money into the joint account means you won't have to make tough decisions about how much each person should contribute to your shared one -- especially if you make different amounts of money. You can help keep each other accountable for spending goals, and more quickly amass funds in your joint account to pay for shared expenses. It can also make your money relationship more equal if there's a major earning disparity or if one spouse stays at home.
Of course, it also means you'll lose a lot of autonomy. You'll no longer have your own account to do things with, like spend without asking questions or even buy each other holiday gifts.
My husband and I opted to put all of our money into our joint account just for convenience, especially since we each run our own businesses and the companies have accounts we have to maintain. But have a detailed discussion with your partner about which option is right for you before moving forward. You don't want to deposit your entire paycheck into the joint account only to find your spouse is only putting 25% of theirs in.
2. What bills and expenses will be paid out of it?
The next big question to ask is which bills and expenses will be paid out of your joint account. If you are putting all your money into it, then obviously all your bills would be paid out of it. But, if you're only putting part of your money in, this can raise some additional questions.
For example, say one of you had a pet you brought into the relationship. Would you pay for the vet bills out of your joint account, or just out of the separate account of the person who bought the pet? Or if one of you owned a house before getting together but you both live in it now, would you pay the mortgage, utility bills, and maintenance costs out of your joint account?
Addressing these issues before you move forward can help you avoid conflict and ensure you don't end up overdrafting your account when your partner's mortgage payment unexpectedly comes out of it.
3. Can we each take out money freely?
Since you'll have a shared account, you'll both be legally entitled to take money out of it. But you need to ask your partner when and how this will work.
If you're both taking out money without being on the same page, this could leave you with too little in the bank to cover what you need. It could also create resentment and lead to fights if you don't agree with each other's spending habits.
On the other hand, if you can't both freely withdraw funds, this could lead to resentment or to feeling too constrained. According to research from The Ascent, as many as 48% of married couples admit to making purchases they hide from their partners, while 52.3% of people in marriages believe that lying about money or spending is a form of infidelity. When you have a joint account together, conflicts or dishonesty about spending could become a much bigger issue than if you both have your own money to spend.
If you discuss in advance what the "ground rules" will be, such as perhaps each being allowed to spend a set amount each month without questions, you'll avoid damaging your relationship with your joint account.
Since your relationship is important and money is a leading cause of conflict among couples, it is well worth taking the time to discuss the answers to these questions before even considering moving forward with a joint account. My husband and I had these talks and I think that's a big reason why combining our finances has worked out so well for us.