“Should we have a family joint account?” is the question every intending couple who wants to have a smooth operation of the family financially should ask before they start building a family. As simple as the question is, it can result in a big misunderstanding and disorganization of the family when mishandled.
A family joint account can make or mar the involved parties or one of them depending on different factors such as level of commitment, trust, etc.
Therefore, you must understand the advantages and disadvantages of having a joint account before opening one. So, read on to learn all you should know.
What is a Family Joint Account?
A family joint account is simply a bank account owned by a couple. In this case, the primary reason the couples opt for a one bank account is to enable them to plan the financing of the family better.
Some of the primary characteristics of a joint account are that it is owned and operated by two individuals, it has more than one signature, and the individuals are equal owners; therefore, they can manage the account independently. A joint account can either be a savings or checking account.
What are the Advantages of Joint Accounts?
If you are considering having a family joint account with your spouse, you should know how a family joint account will benefit your relationship and family. Below are some of the advantages of a family joint account.
Easy Access to Funds
New couples being able to access funds easily as a family is priceless. As a family, a joint account grants the individuals easy access to funds in an emergency.
It also empowers the family to run smoothly without one partner because, due to the joint contribution, the family will always be 90% financially covered.
Easier to Save Up for a Need
Without joint accounts, it may be difficult for some couples to save due to low income, but with joint accounts, couples can quickly achieve their collective savings goals. When couples have joint accounts, and each religiously contributes their quota, the family can save up quickly to afford whatever they need.
Transparency
This is an intangible but great benefit of a family joint account. In a relationship, transparency is crucial, and that includes financial transparency.
Lack of financial transparency can lead to a conflict of understanding and interest in the family, but a family joint account allows the two involved individuals to know the economic capacity of the family in real-time, helping them always to make the best decisions for the family even when they are apart.
Easier to Pay Bills
Sometimes, couples can decide to split the family bills. Even with this agreement, they can easily fall short without a proper strategy for executing it.
A family joint account makes it easier to pay bills because they don’t need to always calculate percentages per bill, which can lead to misunderstanding. They only have to send their agreed quota to the account while any bill is paid from the account.
Ultimately, a joint account reduces the financial pressure in the home and makes it more conducive and peaceful.
Also Read: 10 Financial Management Tips for New Couples
What are the Disadvantages of Joint Accounts?
Just like there are advantages of having a joint account as a couple, there are disadvantages that you should be aware of. Below are some of the disadvantages of a family joint account.
No Individual Control
The fact that the involved individuals have equal rights over the account eliminates the possibility of individual control. This has its advantages, but people can change. When a spouse changes and violates the rules they have set for the family joint account, such as excessive spending, etc, the other party can’t stop them.
Loss of Financial Freedom
Loss of financial freedom commonly happens when the individuals only have a joint account. It is advisable that in addition to the family joint account, the individuals should still have their personal accounts.
Without personal accounts, individuals would lose their financial freedoms, which can lead to misunderstanding. Though they are partners and a family, they must maintain a healthy level of individuality to avoid feeling suffocated in the relationship.
Messy Breakup
I do not think anybody in love wishes for their relationship to not last till death, but sometimes the unfortunate happens, and we can’t do anything about it.
The end of any relationship is always painful due to the intangible investments made, such as trust, love, faith, etc, but this pain is more intense when what you thought would last forever ends abruptly.
If the couple breaks up in an unhealthy manner, they may find it challenging to resolve the family joint account. In some cases, one individual can disappear with the funds in the account, throwing the other person into confusion.
Things to Consider Before a Family Joint Account
We have discussed some of the advantages and disadvantages of a family joint account. We will now look at the things you should consider before proceeding with a joint bank account to ensure the security, good health, and longevity of the relationship.
Ensure there is Trust
Family joint accounts can build trust among couples, but it is far better to ensure solid trust in your relationship before doing that.Â
Trust should be the basis for the discussion about having a family joint account in the first place.
When you are confident that a good level of trust exists in your relationship, it is time to consider other factors.
You Share the Interests
Trust is crucial but is not all there is to consider. You should ask yourself, ‘do we have the same interest’? This question is crucial because you don’t want to start something with someone who has a different interest from yours.
You share the same interests when both of you share the same financial goal for the family and agree on a joint account. That means that everyone is on the same page.
Good Money Relationship
Now, you share the same interests, but what about their relationship with money? You want to pay attention to this part because owning a joint account with someone with a bad relationship with money is risky.
This refers to how they see money, what money is to them, how they treat money, and whether they are pro-savings or anti-savings. Etc. Understanding their money relationship lets you know if they can commit to the cause.
Stable Source of Income
Even with an agreement of interest, a good money relationship, etc., it is only possible for one to meet their share of the bargain when they have a stable source of income. Therefore, as a couple, as you are discussing opening a joint account, consider the family’s financial capacity. How much does each person earn, and how stable is it?
Also Read: How Money Can Put a Strain on Your Marriage
Conclusion
Family joint accounts can be the ingredient your relationship needs to wax stronger because of its advantages, such as transparency, trust, financial security, and accessibility.
Nevertheless, if you jump into creating a family joint account without doing your due diligence, such as ensuring that you are on the same page with your partner in terms of interest, money habits and relationship, stable income, etc., you may be setting yourself up to experience the disadvantages.
Therefore, ensure that a joint account will improve your relationship; otherwise, do not do it.
