Is a Joint Bank Account a Wise Financial Move?

by Holly Welles
Pooling incomes and expenses into a single set of bank accounts makes sense for a lot of couples—but not for all of them.

When you decide to wed or simply combine households with your partner, financial matters move to the forefront. Cohabitation can help couples save money on living expenses, but bills remain. How do you and your loved one divvy up who pays what?

Traditionally, you and your partner opened joint checking and savings accounts to pay the monthly bills. However, depending on the unique economic situations of you and your partner as well as your personalities, combining income in one account can cause more headaches than it solves.

Here are the options you and your beloved have when deciding if a joint bank account is a wise financial move.


Understand your options.

When you and your love take the plunge into marriage or cohabitation, it’s important to understand the bank account options you have:

  1. Joint checking and savings. You can go the route of pooling your income into joint checking and savings accounts. Many couples choosing to go this route state it makes them feel closer and builds trust. It also bolsters convenience, as you won’t have to wait for your sweetie’s OK to go grocery shopping or pay the electric bill.
  2. Keeping everything separate. Of course, no law says you have to combine your income with your partner. If you already have an established checking and savings account at a financial institution you love, there’s no need to stop using them. The convenience of this method includes not needing to fill out new direct deposit forms at work.
  3. Go for a combination of the two. You also may decide to keep both separate and joint accounts. Some couples open a joint checking account for household expenses but maintain their own for personal shopping sprees. Others choose to have different checking accounts but manage mutual savings for things such as buying a home or taking a vacation.

As with most things, all three methods have their pros and cons. In the end, what works best for you and your partner hinges on legal and pragmatic considerations.

Pros and cons of joint accounts.

The primary plus of opening joint bank accounts is knowing where you stand financially as a couple at all times. When you and your partner share login information and access to joint accounts, either one of you can check your balance and know whether it’s enough to cover expenses.

Combining accounts can prove problematic if you’re a big spender while your partner pinches pennies. If opting to combine income, have a heart-to-heart with your partner and establish ground rules for spending. You may set an amount, such as $100, which either party can spend freely, whereas larger expenditures require you and your love to agree.

Life happens, and sometimes, that involves tragedies. If you and your beau have not penned your wills yet, one advantage of a joint account includes instant access to funds. Although you don’t want to imagine anything terrible happening to the one you love, car crashes and illnesses can strike out of nowhere. Also, if your loved one ends up in the hospital unable to communicate, you still can pay the rent from your joint monies.

When you’re better off keeping things separate.

The advantages of joint accounts are considerable, but that doesn’t mean pooling funds works for everyone. If you and your partner share strong independent streaks, maintaining separate accounts may create less friction. Some people, especially those who have experienced financial hardships in their past, bristle at the thought of someone else, even someone they love deeply, accessing their hard-earned cash. If this sounds like you, why create unnecessary conflict?

Additionally, if you or your partner have a poor credit history, you may benefit from keeping separate accounts. Legally, debt collectors consider joint accounts fair game. If you or your beloved have student loan or tax debt, federal and state authorities can levy joint accounts, leaving you in the lurch. However, if you maintain separate accounts, only your partner suffers the hit.

If you and your partner do decide to keep your accounts separate, you’ll need to discuss how to divide expenses. Splitting every bill 50/50 is one method, but it requires you to exchange considerable funds throughout the month. If you have unequal incomes, consider assigning the lower-earning partner responsibility for smaller bills like phone and internet, while the higher-earning party tackles the rent or mortgage payment.

Those who live in community property states also should remember any debts incurred after marriage become the joint and several liability of both parties. This isn’t to say you and your love shouldn’t tie the knot. It does mean having a discussion, as you don’t want to get stuck footing the bill if your partner takes out a personal loan, installment loan, or credit card you’re unaware of and you later split up.

Making the right financial decisions for your relationship.

Every relationship creates a unique new world only you and your partner share. While you may float on happy waves of romance currently, other than infidelity, nothing destroys relationships like arguments over money.

Regardless of how you and your partner structure your accounts, make creating an emergency fund a priority. This keeps you and your beloved from falling into debt when unexpected costs, such as car repairs, arise. Be sure to carry adequate insurance coverage in case theft, fire or flood results in damage to property.

Happy romantic (and financial) lives.

Every individual and couple have their own economic style. By keeping the lines of communication open, you and your partner can enjoy a healthy romance as well as a bright financial future no matter how you structure your bank accounts.

Communication is key to building a healthy financial future with your partner. Otherwise, you two could end up relying on short-term bad credit loans and no credit check loans (like payday loans, cash advances, and title loans) to make ends meet.  To learn more about balancing money and relationships, check out these other posts and articles from OppLoans:

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