If you’re longing for a family holiday, are planning on buying your first home or are thinking about adding to your family, then a joint bank account may be the perfect solution. According to a survey, 68% of millennials share at least one bank account with their spouse, so if you’re looking for ways to overhaul your finances, then now could be the right time to open a shared account. So, what should you consider before signing on the dotted line?
Weigh up the pros and cons
One of the biggest pros of sharing a bank account is that you both have instant access to your money and can easily review your finances. However, this can also be a negative as, if one of you spends significantly more on purchases, the other can see the extent of your outgoings. Another benefit is that in the event of illness or hospitalization, you can be sure that the healthy partner is able to keep the family home running and pay the bills. When you’re sharing responsibility it’s easy to let things slide and assume that your other half will take care of paying the latest bill you’ve received. Therefore, good communication is essential to avoid a missed payment which could affect your credit score and ChexSystems score. Your Chexsystems score is something that will stick will you for up to five years, while, your credit score can impact you for significantly longer and affect your chances of obtaining a mortgage or even a simple cell phone contract.
Talk it through
The first thing you should do once you’ve both agreed to set up a joint bank account is to agree on the amount of cash you will both put into the account each month. It’s good to have this discussion to avoid any conflict down the line and it prevents one of you from assuming you’re both putting all your salary in and the other thinking you’re just transferring a share of it. Another factor to consider if you are both keeping your personal accounts is what your joint money will pay for and what you’ll pay for with your own cash.
Things to remember
When your name is connected to a joint bank account, it’s important to remember that you are responsible for all that goes on in that account. Therefore, if the account falls into debt, you are liable to pay it off, even if it wasn’t accumulated by you. It’s also essential that you’re aware of your spending and limits as your maximum withdrawal figure will be shared between the two of you, even though you’ll each have your own cards, pin numbers, and online login details. Therefore, when you’re making a big purchase or are buying multiple items on one day, be sure to inform your other half to prevent them encountering a problem when they use their card.
Joint bank accounts provide many benefits to couples and their family. If you think one is right for you, make sure you have a full and frank conversation with your partner and agree to the same terms. It’s also beneficial to weigh up the pros and cons and consider all aspects of what a joint account entails before committing.