What to consider before opening a joint bank account and why there are fewer couples

For some, opening a joint bank account is a turning point in the relationship.

It can also make life easier when it comes to paying joint bills and working towards joint financial goals.

But couples are increasingly choosing to remain independent when it comes to money, according to certified money coach Natasha Janssens.

“I’m seeing an increasing number of couples (especially younger) who keep everything separate,” says Ms Janssens, who lives in Ngambri, Canberra.

Sharing money isn’t a prerequisite for a financially healthy relationship, he says, but having a joint bank account is beneficial when managed properly.

Benefits of joint bank accounts

While for some people finances may be kept as separate affairs entirely, that doesn’t necessarily mean you’ll avoid financial conflicts, says Ms. Janssens.

At the same time, she says, the situation can get tricky when there are children in the picture or something out of the ordinary happens, such as someone in the relationship becoming ill and unable to work.

For these reasons, he says, it’s worth considering having at least some money pooled in a joint account.

Aside from the logistical benefits, this can give some couples a greater sense of “being part of a team,” Ms. Janssens says.

“Sharing the account can make (money related) discussions, compromises and goals easier.

Financial planner Michael Khouri hosts a podcast about relationships and money and says having a joint account can help couples get on the same page.

“It’s much easier to work together toward goals… (and) creates accountability between couples.”

There are potential problems with joint bank accounts

Ms Janssens says sharing the money has the potential to create controversy over how the money is spent.

“Did someone take money that wasn’t agreed upon?”

But he adds that this can also happen in relationships where money is completely separate.

Joint accounts that include day-to-day expenses, for example, can provide transparency but can leave people feeling like they’ve lost financial independence or privacy, Mr. Khouri says.

“My wife and I have separate bank accounts for our daily expenses. Not being able to see every little thing each other spends money on is less stressful and gives us that independence.

“But it’s all part of an overall strategy. We have an overall plan for the family, and other accounts are common as well.”

Ms Janssens says joint accounts can also create opportunities for someone to engage in financial abuse.

One in six women in Australia experience financial abuse. Knowing ways to protect yourself can increase your financial security.

Discussion to be had beforehand

Ms. Janssens says it’s a good idea to get to know each other’s money values ​​and “story” before combining any finances.

“What are your financial fears? What was money like growing up? Are you a spender or a saver?”

Knowing these things about each other will help you achieve success, he says.

Ms. Janssens also recommends setting “rules” for the account and planning how to resolve the dispute.

“Define what the common expense is. Who will handle what? Will we consult at specific times?” are some examples of conversation prompts, he says.

Couples should be prepared for the issue of equity versus equity to come up when discussing what each individual should contribute to the account.

“Look inside and decide what is fair for you. Be curious about what that is,” Ms. Janssens says

Mr. Khouri says it’s important to budget together before opening a joint account.

you can use savings calculators And budget planners to help.

Start small

When it comes time to open the account, Mr. Khouri recommends couples start small.

“Take it small. Start with an account where you both deposit money to cover the bills.

“It’s pretty basic and you can’t fill it up.”

Mr Khouri says people should discuss options with their bank and be wary of pitfalls such as accounts that don’t allow direct debits or accounts that charge fees if you don’t deposit a certain amount each month.

If your first joint account experience goes well, you might consider opening a joint savings account, he says.

“If you want to add a level of control, you can do it in a way that ensures both parties sign to access the money,” Mr. Khouri says.

Finally, you might consider opening a joint account where both of your incomes will be deposited for day-to-day expenses, but that may not be comfortable for everyone, he says.

“Every couple is different.

“If someone in the relationship feels they are at risk of being in a vulnerable situation where they need money… it is important to maintain their financial independence.

“Follow your instincts.”