It is hard to think about money matters when you are staring into each other’s eyes, reveling in the butterflies in your tummy and dreaming of a perfect future together. But unfortunately, you have to! If you both don’t turn your attention to your finances and agree on how to handle them, you could find yourself with a joint bank account having money-fuelled arguments and general discontent in the near future.
That is not to say that opening a joint savings account with your partner is a bad idea and you shouldn’t consider, but there are a few things that you should consider before you sign up to ensure that you’re both on the same page when it comes to your finances.
What the statistics say about couples and money
Is money really such a big deal between couples? The simple truth is that, yes, it is. Don’t take our word for it though, – as the stats say it all! These statistics from The Independent show that finance is one of the most common things that couples disagree on and fight about. Now, that doesn’t mean that you have to be part of that statistic, all you have to do to beat the odds if you have the right approach to money.
5 things to consider before saying “I do” to a joint savings account
If you are ready to take your relationship to the next level, and that next level is a joint bank account, then make sure that you do a bit of homework and thinking before you sign up. Below are 5 top tips and considerations to ensure that you open the best joint account together and avoid those pesky arguments (and disappointments) along the way.
- If there is no transparency regarding money matters, there should be no joint bank account. Sharing a bank account is an intimate thing and both partners should be upfront about how much they earn, how much they will contribute, and how they feel the joint money should be spent and managed. If you have a plan in place for your joint bank account, then you won’t have to worry about one partner suddenly spending more than you consider acceptable. Transparency is about setting realistic financial ground rules with each other.
2. Look for financial red flags
- When you open a joint bank account, you become responsible for each other’s spending habits and debts. Before you tie yourself in to a joint savings account, make sure that your partner isn’t in serious debt or have addictive spending habits such as online shopping or gambling. Make sure that you have this conversation with your partner. If there are red flags, reconsider opening a joint account.
3. Have a safety net
- Just because you have decided to open a joint savings account, it doesn’t mean that you have completely ditch your existing bank account. You can still receive your income to your own bank account and have a set amount that you contribute to the joint bank account each month. This means that if things go wrong between you and your partner, you will always have your existing bank account to fall back on. You don’t have to share absolutely every expense. Joint bank accounts can be used for household expenses, groceries, holidays, eating out, and so on.
- Before you start considering joint savings accounts, take the time to draw up a realistic household budget. This will determine how much you need to contribute from your own bank account and provide a realistic overview of how much your cost of living together is. Also, make a list of all of your current expenses and debits and see if there are areas where you can save and cut back. Perhaps you both have Netflix accounts or you are both paying household insurance, which means that money is being wasted. The more you help each other with budgeting and saving, the more money you will have for your future savings.
5. Do things right
- Make sure that you open up an official “joint savings account” that you both agree on. Sometimes couples open an account in one partner’s name because they deem it ‘easier’. While this might seem like a good idea in the beginning, this is not the best joint bank account option available. It could end quite badly. If the relationship doesn’t work out or if something goes wrong along the way, this can cause serious problems. Make sure that you both have the account details, the account is registered in both of your names, and that you both have bank cards.
4 reasons why joint bank accounts are good for couples
If you have done your due diligence and don’t see any reason why you shouldn’t open a joint bank account with your partner, then consider these 5 reasons why it’s a good idea for some financially secure couples:
- It develops an element of trust between both partners.
- It reduces the risk of one partner feeling like they are covering more expenses than the other.
- Your monthly expenses and spending can be accurately tracked.
- You can help each other cut back on expenses and save…maybe even for that tropical holiday you have been dreaming of.
It goes without saying that there are pros and cons to relinquishing your financial independence and going “all in” with your partner. If you are going to take the next step, it can be a highly beneficial decision. Especially if you plan and prepare for this next phase carefully.
May your financial future together be lucrative and stress-free! Happy bank account sharing!