Financial Trust: Keeping A Joint Bank Account

Financial Trust: Keeping A Joint Bank Account
Photo by Wyatt Fisher – CC BY-SA 2.0

One of the traditional ceremonies that married couples used to share was the merging of finances. Like taking on a new last name and sleeping in the same bed, a joint bank account signified a married couple’s unity. Today, that ceremony is becoming less common, and many financial advisers even counsel against it. If money is the number one source of fighting among married couples, than removing reasons to quarrel should be good for the long haul.

Without going in to depth on a side issue, claiming that a joint bank account is the cause of marital strife is a myth. Mary Jo Rapini, a doctor of psychology says, “Couples who begin to struggle with money issues are having problems at a deeper level than [finances].” Ben Edwards, founder of Money Smart Life says, “Your marriage is not a business partnership, and if you weren’t ready to give up control of your money, then you weren’t ready to get married.” He goes on to say that the disputes over money are fertile ground for growing closer to your spouse.

With the main debate, to share or not to share, settled it is time to look at the benefits of a joint bank account. Those who hold a joint account avoid half of the finance charges that would be associated with two bank accounts. They have an easier time paying monthly bills, and in the event of one spouse passing, probate complications are a moot point.

A Brief Word About Unmarried Joint Account Holders

Of course, not every pair of people who opts for a joint bank account is going to be married. In some cases, an elderly father may want to combine his finances with one of his children, or business partners may want to have a shared account. In either case, the same considerations apply, and while there may be additional relational stresses when two separate people share an account, there are still several good reasons for a combination. Especially in the case of an elderly parent and child, sharing finances will help to avoid probate costs when the parent passes on.

Back to the Point: What a Joint Account Forces

No one would argue that two people (even a married couple) should share an account without building a budget. Really, no one should operate without a budget, but especially not people who pool finances. Keeping a tight budget is the key to avoiding financial mishaps, fights, overdrafts and overall poor money management. Many people who advocate for separate accounts site these reasons as primary factors for their conclusion.

However, if one or both members sharing an account are unreliable in keeping a budget, even those who bring home more money than they need to live will end up overspending, a problem that results in overdraft fees and penalties. While having a shared account opens both partners to an equal risk of having overdraft fees it also streamlines the primary defense against such behaviors.

Through a joint account, partners can set up all their bills to withdraw from one account each month automatically. With a budget, and automatic withdraw for the majority of bills a shared account facilitates couples skipping the discussion about who pays which bill and what charges come out of which account.

Some people will argue that when the two people sharing an account have vastly different earning potential, the one with more money is at a disadvantage. While this may be true, especially with partners, part of being a committed couple is sharing burdens equally. Joint finances help people to press into the issue of exclusivity.

There is no question, a joint bank account will be the source of many disputes between partners. Even couples who follow a budget to the letter will have arguments about money. People who agree about how to spend money will have moments when they wish to proceed differently from their partner. All of these factors certainly add to the stress of a united income, but as any good relational counselor will say, fighting is beneficial for a relationship and staying humble enough to admit wrongs is key to keeping the trust alive.

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