10 questions before getting your first joint account
It is one of the great milestones of every serious relationship, and one that brings with it full adult status. If you are involved or living with your partner, there are many reasons to get a joint bank account. But it’s not a decision you should make without thinking about some important points first.
Here are 10 things you should ask yourself before deciding whether a joint account is the best option for you:
1. How common do you want to be?
You do not have to share everything. You may only want to set up an account to cover your combined expenses like bills, rent, food. You can also have a second account for the things you are saving like furniture, holidays, or a wedding. Then you can keep everything else as your current account or separate personal savings per hour.
2. What happens to existing savings or expenditures?
Combining the money you have already saved would be more interesting, but you may not want to split everything in between. There is nothing wrong with wanting to keep what you worked hard for. At the same time, is it fair to ask your partner to share in your expenses that you have never shared before? If you’re using the Netflix signature, fine. But if they are already paying for a phone contract at a price they are happy, is it fair to ask them to pay half of yours?
3. Can money talk and make up your mind?
It’s no big secret that most arguments in relationships always boil down to money issues. You two need to feel comfortable talking about each other’s finances and spending. It makes no sense to share a bank statement if every time you get into the subject, you end up getting into conflict.
4. What are the other’s attitudes towards money?
Not just your own attitude, but also that of your partner. Are they both good savers or is one more irresponsible with their money than the other? Could this cause problems between you in the future?
5. How will this affect your credit rating?
When you share a joint account, your credit history is linked. This means that if any of you have bad credit, it will affect the credit of your partners as well. It may be best to keep things separate until both credit scores look better.
6. Do you both know the whole story?
Before committing to the financial responsibility of a shared account, you should have a conversation about the other’s monetary situation (Yes, this seems strange at first). Be totally honest. There can be no secrets. Tell each other about every expense, debt and all the savings you have. If someone is going to share financial responsibility with you, you need to know exactly what to expect.
7. How are you going to keep things fair?
If two people have access to an account, the money is expected to be used equally. And if you can, you should deposit the same amount each and set equal limits on how much you are allowed to spend.
8. Who holds the reins of the accounts?
Ideally, you should be sharing responsibility for managing the account and expenses. But it may end up that a person ends up dealing with most of it. If this happens, it is important that both of you are satisfied with this, and there is no lack of resentment on either side. Remember, the money belongs to both. That means you should have equal access and know what is being spent and where.
9. What happens if someone is not helping?
It may be through illness, child expenses or losing a job, but how will you manage if one of you is not earning? Are you going to suggest joint options to cover this possibility or continue to cover this fault alone? If this happens, does the other person still have the same right to money in the joint account or the scales need to be adjusted?
… And the most important …
10. What happens if you bre
Fingers crossed so it never happens, but you need to talk about the worst case scenario. What guarantees do each of you have that will not lose all the money? Are you going to share everything in the middle of what remains? What happens to common expenses until everything is settled, and who will be responsible if not paid?
We are sure you agree that there are some embarrassing questions that need to be asked, and it will not be a fun conversation. But like all the big decisions where money is involved, it’s important everyone knows exactly where they are and what they’re getting before signing anything. It is a great compromise, and no one can predict the future. But the two most important things you need in any relationship are trust and honesty. And how much finance is no different.