Joint Accounts – Are They Right for Your Relationship?

Money. It’s a touchy subject – not one that most couples want to discuss. Yet it is one of the top reasons for arguments. Thus planning wisely and communicating about money just might be the key to helping you and your significant other enjoy a long and happy relationship.

Whether or not to pool your money into a joint account is one decision that couples need to make. While there are many pros to doing so, there are also many factors to consider before taking the plunge. It is, of course, important that you are both on the same page, have the same goals in mind, and be completely open and transparent with each other when it comes to your finances. Ground rules should be put in place and you should both be comfortable with the arrangements.

Before you even hit the bank, you need to be honest with each other about your financial situation – any outstanding loans, overdue accounts, or other financial flags should be addressed. If you do go ahead, you should decide whether you will contribute equally, or an amount based on income. You should determine which expenses will come out of the account. You should set a budget.

A “Yours, Mine, and Ours” approach is often suggested as a way to keep personal expenses separate from those to be shared. The amounts set up for “yours” and “mine” again should be predetermined and agreed to by both sides, and essentially what’s done with that money not questioned by the other. The “ours” account could include household expenses, date nights, lease payments for the “family” car, or whatever you deem should be shared.

A consideration not to be overlooked is that without a joint account, should one of you pass away, the deceased’s account can be frozen, leaving the other to wait until the bank is satisfied with a probate will, which can take several months. This could leave the surviving partner in a tight financial situation. A joint account alleviates this situation.

While you may feel the need to keep some aspects of your finances a secret, keep in mind you are in a committed relationship, or should be if you’re pooling your money. If you can’t be totally honest with each other, your finances may not be the only thing in jeopardy. No doubt, you’ll still have arguments, but having open, constructive, ongoing conversations about what’s happening in your bank account can lead to financial (and relational) success.