When you get married or become part on an established, long-time committed couple, one of the first questions that arises is how to handle your finances. Should you keep separate accounts or merge your assets together into a joint account?
The answer, of course, depends on you and your significant other and which way you feel most comfortable. My husband and I happen to have joint bank accounts, and for us, that works great. However, if you decide to go this route, know that there are definitely some dangers of a joint bank account to consider.
It’s Hard to Surprise One Another
What if you want to surprise your spouse on Father’s Day with a new gas grill? If you share a checking account, it’s a bit difficult not to notice $200 missing from the account, especially if your spouse is the one who regularly reconciles the account. Surprises when you share joint accounts are a lot more difficult to pull off.
There’s a Good Chance of Overspending
If money is tight and you keep a low balance, there’s a good chance that you could overspend and possibly bounce a check. For instance, if you just have $200 in the checking until pay day and you buy $150 worth of groceries the same day your husband fills up his truck with $80 worth of gas, you’ve overspent and will likely bounce your transactions.
There are two ways to avoid this scenario. First, communicate, communicate, communicate. You may even need to discuss with one another in the morning what you plan to spend if money is this tight.
An easier option is to have one person get a set amount of cash to use for the week for gas, meals out, etc. Then, the other person will know how much remains in the account and how much she can spend.
One Person Can Drain the Account
If you’re in a relationship with a spendthrift or someone with an addiction, you may want to rethink a joint bank account because the person could easily drain all the money from your account, leaving you with no funds to pay bills.
Secondly, if your relationship ends, the other person may drain the account out of spite or to simply get away from the marriage.
There are plenty of advantages to sharing a joint account, but there are also significant perils. In the end, you and your partner need to decide which method (joint or separate accounts) works best for you.