Pros and Cons of Joint Accounts

Joint Accounts: Do the pros outweigh the cons?

A relationship will naturally progress to a place of sharing – you share your food, your living situation, your friends and a majority of your time. But should you share your finances? Is a joint account the next step in your relationship or marriage? Consider the following list of pros and cons of having a joint account.

The Pros of Having a Joint Account:

1. Convenience of Bill Pay
   Having a joint account can make paying bills easier. If you share a joint account, paying for rent, utilities, a car payment or insurance is more convenient. Also, when making purchases, neither of you has to worry about who pays – you both are!
2. Equality in the Relationship
   When you both share the same account, there is a sense of equality established in the relationship. Each of you has access to the same account information, and you both have access to purchases made with the account. Even though your salaries differ, it is established that the two of you are working towards a future together by pooling your paychecks for shared expenses.
3. Accessibility During Unexpected Events
   If a major life event is thrown your way, a joint account may allow you to bounce back faster. If only your spouse’s name is on an account and they become injured or are hospitalized, you could be unable to get the money needed to cover their medical bills. 
4. Teamwork
   Having a joint account can be a good way for you both to combine your savings goals, and keep tabs on how much progress you’re making. A joint account can increase trust in your partner, fostering unity in your relationship.

The Cons of Having a Joint Account:

1. Lack of Privacy
   When entering into a shared account with a significant other, you automatically release any privacy you had over your finances. You two may have different spending habits, that could cause arguments when someone spends an amount the other doesn’t agree with. Now your spendings affects your partner's spending. Buying gifts or surprising them can be difficult when your partner can see what you’ve purchased. However, you can work around this by using cash!
2. Acquiring Debt
   When you enter into a joint account, both of you will be responsible for future transactions. Any past debts your significant other has, such as student loans, credit card debt, or auto loans, will remain their responsibility. Although you are not required to take on the debts of your significant other, many couples pay off debts together. Make sure to talk about any debts either of you has, and any amount owed. Consider if you’re willing to help pay for any debts that may not be your own.
3. What if Your Relationship Ends? 
   Break-ups are difficult and separating yourself from someone you once cared for is stressful and painful. If the relationship between you and your partner ends, you’ll need to divide finances and create new accounts. With separate accounts, you and your partner can have protection for your finances in the unforeseen event you decide to split.

Communication is key. Remember, these points can be helpful in deciding whether to enter into a joint account, but they are not conclusive. Talk to your partner about what is best for both of you, and seek advice from a Certified Financial Planner regarding your finances.