We always talk about how it is good to manage finance wisely as individuals as it helps you spend on relevant things, and still have money to spoil yourself. Handling finances as a couple is difficult compared to managing it individually. Money personalities might differ; say, a saver and a spender, their attitudes towards money are different. While the spender will want to spend as the money comes, the saver thinks about the future and saves. And then the question comes, does a joint bank account solve the problem of managing finance between couples?
Most people believe that having a joint bank account is the solution for couples about to start a family together. In truth, having a joint bank account doesn’t work for everyone, and it depends on the individuals involved. Before opening a joint bank account with your partner, you must be able to weigh the pros and cons. Also, the financial goal you tend to achieve by sharing an account. These are discussed below:
What is a Joint bank account?
It is an account in which two individuals share the same bank account. This means that both individuals have equal access to the bank account. Either party can put and remove money at will and decide to close the bank account as they deem fit. Both parties can see activities going on in the deposit account without asking for permission from anyone.
Pros of a Joint bank account
Having a joint bank account makes for transparency for both people as each individual can see what goes on in the bank account. Individuals can track expenses; they know where their money is going and what expenditures are made. It also allows for better management of finances. Individuals can manage finances because they can monitor each other’s expenses. Also, they know what’s available via deposit of funds of each partner and plan with it.
Cons of a Joint bank account
As much as you can track what happens with money in the bank account, there’s only much you can monitor because you don’t know what your partner withdraws the money for. They could use the money for personal stuff rather than for something that would benefit both of you. One of the partners ends up overspending, which brings resentment in the other partner. In cases of divorce, one partner might decide to close the account to the detriment of the other partner. It also prevents financial independence as couples don’t have the right to their money without being accountable to the other party.
Things to consider before opening a Joint bank account with your partner
You have weighed the pros and cons, and you still feel a joint bank account will work for you and your partner. You also have to consider some things before you finally plunge into it. Remember, it should be what works for both of you.
Knowing your goals
I decide to go on a weight reduction program. My goal is not just because I want to lose weight. I have specific goals, which could include tummy reduction, butt increase, or arm fat reduction. Having a specific goal, helps me focus on why I joined a weight loss program. If I don’t see results, I switch to the next available option. It is the same when planning to have a joint account. You have to think about why you want to open a joint bank account, and what you plan to achieve.
Acknowledge spending habits are different
In opening a joint bank account, you should also be able to acknowledge that you’re two different individuals and have opposed spending habits, and there would be times when the other would spend more. Admitting to this fact will enable both parties to come up with possible solutions that would favor both parties.
Consider money management routines.
By considering different money management routines, you discuss techniques that are beneficial to both parties in managing money effectively. For example, you could draw out a budget and estimate the total expenses for the month. You might also include how much each party is to spend personally, depending on their schedule for the month. This helps to improve their sense of financial independence. Both parties are part of the planning process of the money and it gives them a sense of involvement. It also makes for accountability to each other. Choose a management plan that works for both of you and work towards it.
Having read all this, and you still feel a joint bank account is the best decision for you and your partner, then, by all means, go ahead. There has to be consideration of all parties involved, given that it does not concern one individual. All relationships are not the same and require different methods to make them work. It is important for couples to discuss what works for them and work towards it. Save with dodopay and get 22% interest per annum.