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When a Joint Account Does (And Doesn’t) Make Sense


Getting married means joining your life with someone else’s and for many couples, it can take some time to work out all the kinks. One of the most important things that needs to be addressed once you tie the knot is how you plan to manage your household finances. If you’re used to keeping your bills and income separate, it can be challenging to come up with a solution that makes everyone happy. A joint bank account may (or may not) be a good option to manage finances.

There are plenty of good arguments for opening a joint account. For instance, it can be easier to keep track of your cash when all of your bills, income and savings are in the same place. By definition, it’s also less expensive to maintain joint checking accounts since you don’t have to worry about getting hit with excessive fees times two. Despite these advantages, joint accounts aren’t right for everyone. If you’re planning on getting hitched, here are a few things to consider before you merge your money.

Evaluate Your Spending Habits

Joint Account

When a saver marries a spender it can spell financial disaster if you’re constantly butting heads over money decisions. The first thing you need to look at before you pool your finances is how well your individual spending habits match up. When one spouse has a serious shopping habit or spends carelessly on small things it can become a source of friction for both sides.

Before you set up a joint account it helps to have some boundaries in place to ensure accountability. For example, you may decide to have a joint checking account for paying bills but each maintain separate accounts for discretionary spending. If you choose to go this route, you should both be clear about what the guidelines are for each account. The goal is to allow both sides to have some autonomy with their money but it shouldn’t come at the expense of your budget.

Add Up Your Expenses

If you and your spouse work, you also need to figure out how you’ll divide up your expenses. There’s no right or wrong way to do this as long as you’re both on the same page. For instance, you may decide to divide the bills based on your individual income. If one spouse earns 70% of the income and the other earns 30%, you would each pay the corresponding percentage of the bills. For some couples, it may make more sense to use one person’s salary to pay all the bills and save the other spouse’s income.

Dividing up the bills is a little more challenging when only one spouse works. In this situation, it’s easy for resentment to build if the working spouse feels like they’re carrying all of the burden. At the same time, the nonworking spouse could feel like their lack of income translates to a lack of independence in the relationship. Finding the right balance is essential to building a strong foundation for your finances and your marriage overall.

Assess Your Savings Goals

Without specific goals for saving, you may find it harder to hang on to your cash. It makes it a little easier when both spouses are savers but you should still take some time to go over what your goals are to see if a joint savings account is the right move given your marriage. If one of you wants to use the money for a down payment on a house while the other wants to splurge on a dream vacation, it’s likely to create conflict.

Ideally, a joint savings account should be used to fund joint goals. If you both have other things you want to save for then you might want to set up separate accounts for those things. While you may not agree on how the money should be spent, you should each respect the other’s desire to reach his or her savings goal.

Before opening a joint account, you should consider sitting down with a financial advisor to draw up a financial plan and identify your long-term goals. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

When Separate Accounts Are Better

Joint Account

Even if both spouses are on-board with the idea of joint accounts there are some situations where you’re better off keeping things separate. If one of you has racked up a ton of debt because of poor financial decisions, maintaining separate accounts can protect the more fiscally responsible spouse if debt collectors come calling, as joint accounts with rights of survivorship passes sole responsibility of the joint account to one spouse if one co-owner passes away. You should also think about separate accounts if one of you is paying alimony or child support so it’s easier to keep track of these obligations.

Separate accounts are also a no-brainer if one spouse has a problem with spending stemming from an addiction to gambling, drugs or alcohol. Allowing them unlimited access to the money could add up to financial and emotional chaos.

Ultimately, the decision to maintain separate or joint accounts comes down to how your relationship works best. Allowing each person to have a say in how the money is spent, as a couple and as individuals, can eliminate tension and keep your financial house in good working order no matter the account status.

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