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Combining your money is a scary thing for a lot of people.
Giving up control and freedom when it comes to money is a big reason why so many people have separate bank accounts.
But there are many benefits to combining your money.
In this post, I highlight 10 pros and cons of joint bank accounts that you need to consider.
By understanding the many benefits as well as the downsides, you can make a better decision for your money and your relationship.
And since money is the biggest issue in relationships, getting this right could be the difference between staying together or separating.
Table of Contents
10 Pros And Cons Of Joint Bank Accounts
5 Pros Of Joint Bank Accounts
There are many advantages of joint bank accounts.
Here are the biggest ones you are likely to realize.
#1. Easier To Manage Finances
Hands down one of the biggest benefits of a joint account is the ease of managing household finances.
For starters, you don’t have to assign bills or household expenses for each person to pay.
You don’t have to determine how much money each person needs to save to reach your savings goals.
You likely have long term and short term financial goals.
With a shared account, it encourages you to work together to reach these goals.
When you each have an individual bank account, it is much harder to reach your goals.
This is because you have to decide who will fund each goal, how much will be contributed, how often money is saved, and more.
Whereas a joint account lets you see everything in one place and you only have to decide on how much you want to put towards the goal.
#2. Brings You Together
When you have separate finances, it hurts the relationship over the long term.
This is because even though you are married or in a committed relationship, money is still looked at as yours and mine.
By having joint accounts, it brings you closer together and you fully operate as a team, not as individuals.
I experienced this myself.
When I first married, we kept separate accounts.
It was good at first, but over time, it felt like we were roommates sharing the bills.
Once we combined our accounts, we felt like we were a team, working together to reach our goals.
#3. Easier To Pay Bills
While many people prefer to keep separate bank accounts, combining them into one makes it a lot easier to pay bills.
The way bill payment is approached with individual accounts is one person is responsible for certain bills, like mortgage or rent, car payments, etc. and the other person is responsible for other bills, like utility bills, groceries, etc.
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While this does work in the short term, over time it can be a point of contention.
And let’s not forget you need to divide up who pays what in the first place.
With a joint checking account, all bills are paid from one account.
And since both account holders have full access to the account, either person can do it at once.
The same goes for savings accounts too.
Either person can transfer money into savings whenever they please.
#4. Fewer Possible Fees
Most traditional banks have all sorts of monthly fees they charge.
This includes minimum balance fees, a monthly maintenance fee, overdraft fees, and more.
When you have separate checking accounts, you run the risk of paying twice as many fees.
But when you combine finances, you can avoid just about all of the fees.
This is because you will have more transactions and a higher daily balance.
And in many cases, debt card transactions factor into whether or not you pay a fee.
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Since you both have a debit card, this is another way to avoid the many fees banks impose.
#5. Simple Legal Process
The final benefit of joint bank accounts is all about the legal process.
The most common type of joint account is a joint tenants with rights of survivorship account, or JTWROS.
When you have joint ownership on an account, you each own 50% of the account.
So in the event you or your partner pass, the surviving spouse can still have access to the account and transact on it.
With an individual account, you will need to be the executor and follow the rules of your state for how and when you can access this account.
While things are little different for married couples versus unwed couples, it is still easier when you have a joint account.
5 Cons Of A Joint Bank Account
As great as joint bank accounts are, there are drawbacks.
Here are the most common drawbacks people encounter.
#1. Buying Gifts
A major drawback of joint accounts is buying gifts.
When you share a single account, you will be buying gifts for each other from this account.
This leads to two possible issues.
The first is if your partner checks the transactions, they will see the gift or question the expense.
The other issue is it won’t feel like a gift.
This is because you both fund the account so in reality you are both paying for the gifts.
This turns a lot of people off to the idea of combining accounts.
The workaround to this is to have a joint account but maintain a separate personal account as well.
The majority of your income goes to the joint account and you each take a percent for your own accounts.
This money can be spent any way you please.
#2. Money Fights
An important thing with a joint account that can’t be overlooked is the potential for money fights.
When you combine all your money into one account, you see just how much the other person spends or doesn’t spend.
If you are a saver and your partner is a spender, you can get into fights when the account balance drops but the spending doesn’t.
The reality is however, that even with separate accounts, you can still have money fights over spending habits.
The solution is to have open conversations about money and your goals so that you both can be on the same page.
Then regardless if you use a joint or separate account, you will limit any fighting.
#3. Lack Of Control
Lack of control with money is a real thing.
When you have your own account, you control the money coming in and going out.
But when you have a joint account, you lose some of this control.
It is no longer your own money.
Your partner now has some control of the money coming in and going out.
This scares a lot of people into keep their money separate.
The only solution is to not keep your money apart, but to work together to find a way to make things work with a joint account.
#4. End Of Relationship Issues
If your relationship ends, a joint account could be a headache.
This is because you both own 50% of the account and have equal access.
In other words, half of the money in the account is yours and the other half is your partners, regardless of who deposited it in the account.
Also, before a relationship ends, one partner could withdraw all the money in the account and run off.
So if you have a large sum of money in a joint savings account, either joint account holder could withdraw all the money and skip town.
#5. Perceived Lack Of Freedom
Depending on how money was handled growing up, joining your finances could lead to a perceived lack of freedom.
For example, you might be hesitant every time you go to buy something for fear that your partner will question you about the purchase or get angry that you spent money.
The solution to this is to be open with your partner about money and talk about it.
The more you have money conversations, the more you can find a solution to this issue.
At the end of the day, there are many pros and cons to joint bank accounts.
For many, the biggest reason to combine your money is to be a complete team in all areas of life.
This will lead to a stronger bond and more teamwork in striving for your financial goals.
But still, joining accounts may not be for everyone.
That is why you need to think about all the positive and negative possibilities and then make the decision as to combine your money or not based on your specific situation.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.