When you get married, one of the first big decisions you’ll have to make is whether or not to open up a joint bank account with your partner.
There are many people who decide that opening a joint account is the right move. In fact, a recent study found that about 75% of couples have at least one joint bank account.
But there are also some people, especially millennials, who prefer to keep their money separate from their spouse’s money. Many of them simply aren’t willing to give up their financial independence once they tie the knot.
Are you currently trying to figure out if you should open a joint bank account with your spouse? Before you make your final decision, you should weigh the advantages and disadvantages of doing it.
Here are some of the pros and cons that come along with opening a joint checking or savings account.
Pro: You Will Both Have Access to the Same Money at All Times
If you and your spouse have separate checking and savings accounts, it can be difficult trying to figure out who will pay for what on a regular basis.
Who is going to be in charge of paying the rent or mortgage every month? Who is going to take care of the electricity bill? Who is going to cover the bill at the bar or restaurant?
You are going to have to ask yourselves these questions all the time if you don’t have a joint bank account.
And while you might not have trouble figuring out who is going to pay all of the big bills, there are going to be times when one of you might be low on money and unable to pay for a meal or a night out on the town.
That’s when trouble can arise, as one person might grow to resent the other for having access to more money than they do. With a joint account, you won’t have to ever have to worry about running into this situation.
You and your spouse will both have a pool of money that you will get to spend together.
Con: You May Occasionally Argue About How You Spend Money
While having a joint bank account will eliminate the need to sit down and discuss how each and every bill is going to be paid, it won’t necessarily do away with arguments about money.
While it can be nice to have one pool of money that you use to pay for everything, you and your spouse might not always agree on how you spend that money.
If you run out and spend $200 on drinks with your buddies without asking your spouse first, she might get mad at you for it. At the same time, if she runs out and decides to spend $200 on a new pair of shoes, it might not sit well with you.
Even if you have more than enough money to cover purchases, you and your spouse are occasionally going to butt heads when you have a joint bank account. You’re not going to think he or she should have made certain purchases and vice versa.
Pro: You Will Be Able to Maintain a Higher Balance and Avoid Fees
When you have your own bank account, you might struggle to keep it stocked with enough money. This can lead to you paying fees every month to have the account.
With a joint checking or savings account, it’s easier to avoid these fees since you’ll have two people contributing to the account and maintaining a bigger balance.
This will allow you to enjoy all of the perks that come with a checking or savings account without having to pay the fees associated with having a low balance.
Con: You Will Lose the Privacy You Felt When You Had Your Own Account
Unless your significant other doesn’t pay attention to your joint bank account, it can be just about impossible to hide any purchases you make from them.
This won’t you affect you too much on a daily basis. But it’s going to be hard to surprise them with a great gift on Christmas when they’re keeping tabs on your spending habits.
You will lose whatever privacy you had when you were managing your own bank account, and it can be frustrating for many people.
Pro: You Will Give Yourself Certain Legal Advantages
If you were to die tomorrow with a boatload of money in a bank account separate from your spouse, your partner might not be able to touch that money for a long time. There are some instances in which it can take months for a person to gain access to money that legally belonged to their spouse.
You can cut through a lot of red tape by simply having a joint bank account in place. You won’t have to worry about your spouse getting cut off from your funds when you die when they’re just as entitled to the money in your joint account as you were.
Con: You Can Find Yourself in a Tricky Spot If You Ever Split Up
In the event that you and your spouse break up and decide to divorce, a joint bank account can prove to be problematic. It can be very difficult for a judge to decide who deserves to have the money.
While most couples don’t think about divorce when they decide to get a joint account in the first place, you should at least be aware of how it could present problems in divorce court. It can save you from dealing with a major headache later on.
Is a Joint Bank Account Right for You?
Only you and your spouse can decide if getting a joint bank account is the right move for you to make.
Some couples love having a joint account because it allows them to work together on all financial matters. Others prefer to keep their finances separate to maintain some semblance of financial independence.
You and your spouse should speak about money regularly and talk about everything from your bank accounts to your credit cards. You should also discuss any outstanding loans you might have and come up with plans to pay them off.
Read our blog for more information on different kinds of loans and credit cards that can help you and your spouse get back on your feet.