Is Your Relationship Ready for a Joint Bank Account?

For some couples, the decision to open a joint bank account represents a relationship milestone. After all, having an account from which two (or more) people can make transactions independently requires a level of commitment, trust and awareness of each other’s spending and savings styles. And if you’re sharing your resources with your significant other, you’re implicitly sharing your financial goals. 

Or are you? If that idea strikes fear into your frugal (or spendy) heart, you may need to consider whether sharing resources makes sense for your couplehood.

Here are some factors to weigh in making the decision to open a joint account with your partner.
 
Advantages of a Joint Account 
In terms of mere practicalities, pooling your money in a way that allows both of you to have ready access to it makes paying bills more convenient. Plus, you can stay on top of your financial responsibilities as a team.  

Money can loom large in committed relationships, but having common goals and working together is one indicator of a strong bond. So if you’re cohabitating or getting married, sharing a joint account is a way to do just that.

A shared bank account also lays it all out there. Both of you will be able to see exactly where your money is being spent—and that can be important information in aligning your financial goals. And no, you’re not alone if you’ve ever fibbed to your partner about your spending—one in three people who argue with their significant other about money admit they’ve hidden a purchase from their partner.

Knowing you have joint accountability may keep both of you from making purchases that are off budget or that derail your goals. And having talked about those goals, and working on them together, might help you avoid the number one thing couples argue about: money. 

With all these advantages, is opening a joint account right for your relationship? WenFang Bruchett, a former bank manager and the founder of the site Bliss Finance, recommends that couples open a joint account, but says that every joint account must have a purpose. 

You might, for example, set up one account for both of your paychecks to be directly deposited and then flow a set amount of money to two more accounts, Bruchett says. The second account would be controlled by Person A to pay for household expenses and the the third account would be controlled by Person B to pay other mandatory expenses. Another savings account might be used to set aside money for taxes or insurance payments, she says.  

A final advantage: Should serious illness—or worse—strike one of you, the other will still have access to your pooled funds. 
 
Downsides of a Joint Account 
When you’re sharing a joint account, both of you are responsible if something happens. If the account becomes overdrawn, for example, that will affect both of your credit scores. Creditors can also garnish from a joint account to settle unpaid debts, whether you created them or not.

There’s also an emotional level. For some, opening a joint account means giving up independence. And should you break up or divorce, that lack of financial independence could become a headache or worse. Both partners have the right to use the money from the account —or empty it—regardless of who originally deposited the funds. 

“I am a strong advocate for each individual in a couple having at least one account separate from their partner,” says Brynne Conroy, the Femme Frugality money blogger. “I like to think of this separate account as an insurance policy.”

“That doesn't mean you do it secretly,” she continues. “Talking about money with your partner—including any separate accounts you may have—is a vital part of financial fidelity. But it does mean you need to have that conversation and set up some type of cushion for each of yourselves individually, ideally allocating equitable resources to each account, regardless of who earns more.”
 
To Merge or Not to Merge
Conroy touches on a theme common to couples sharing finances: If it’s going to work, regular communication is essential. Discuss both of your debts and make plans for tackling them, go over your assets and talk about your spending styles, and—crucially—your savings goals. Together, you’ll need to put your financial house in order, to budget and to designate regular financial responsibilities.

So should you go all in and merge your accounts, take a partial-merge compromise or keep entirely separate finances?   

“Too many couples pick a system for shared finances without thinking critically about it. For example, some couples completely merge their finances because that’s how their parents did it,” says Sam Schultz, co-founder of Honeyfi, a free app that helps couples manage money. “But like it or not, finances will play a central role in your relationship with your significant other. So make sure you explore your options before making any decision.

Schultz recommends checking in with your spouse after a few months to see if your system is working. He and his wife ended up moving away from a shared system, opting instead for an “allowance” system; he says they fight less and are now more aligned.

And that’s what it’s all about—not just paying the bills together, but doing so in a way that feels right for your relationship. 

Colleen Kane is a freelance writer who has written for CNBC, Fortune, Money and many other publications.

Illustration by Carolyn Bouchard.

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