After my posts on having a second checking account and steps to switch your bank account, here’s the another one. This one emphasizes on the importance of having a joint checking account. Having a common checking account works for us. It may also work for you, this article can provide you food for thought when it comes to managing your separate checking accounts within your family.
Here, at this blog, we grow One Cent at a Time, this tip is not going to make you rich overnight but, it may help you protect your finances and become more efficient in managing it.
Along with current accounts and other savings accounts around, joint bank accounts are amongst the popular types of accounts with consumers in the UK. There are many different reasons why you might want to open a joint account, but you will need to think carefully about your decision before acting on it.
Joint bank account benefits
- Paying rent and bills becomes easier. If you are married, in a civil partnership or living with your partner, having all of your bills, rent and mortgage payments come out of one joint account can make life much easier. As long you both pay in equally, this is a good way to pay your bills.
- Budgeting is easier. By combining your money in one bank account, you and your partner will be able to budget for regular costs and special occasions more easily.
- No more arguments about money. If you both pay in the same amount to your joint account and all bills and payments come out of this account, there will be no more squabbling about whose turn it is to pay a bill.
Things to consider before opening a joint bank account
Opening a joint bank account could be one of the best things you ever do, but it will only be successful if:
- You and your joint account partner are open and honest with each other about money
- You both earn roughly the same or pay in the same amount each month
- There is little risk of a partner absconding with your cash if the relationship breaks down
Now, if you have ‘left over’ money in your joint account after paying your monthly bills, you can both decide the best way to invest/spend the money. I am the only money earner in our family as SMB just became eligible for work and still haven’t fund a suitable job. But there are certain expenses which can’t be paid by credit card, or require additional fee for payment via credit cards. She writes a check for those expenses. This is only possible as being a joint account holder she has the check writing privilege.
She recently enrolled in teacher’s certification course, ABCTE, all expenses were paid via check to avoid 2% fee for credit card usage.
Another big advantage we have because of the joint account is access to security locker. For mere $100 a year fee, all her jewelries and important papers are kept in the bank locker. Now since the bank branch is just walking distance away from home, so, we never really feel that things are not with us physically.
To successfully operate a joint account you need to trust each other. If your relationship is strong and built on mutual respect and trust, your joint account would survive and thrive for many years. As long as both partners are honest and open with each other, they shouldn’t find managing single account between the two a stressful task.
Managing personal finance becomes much easier if the family has only one main checking account where bills are paid from. This is good for your time and resources and to keep track of your net-worth.
Now, there are obvious disadvantages of having joint checking account. Knowing your spouse’s spending habit and your partner overdrawing his/her share may cause rifts and irreparable damages in the family. But, to me, merits outweighs the demerits.
Readers, do you have a joint checking account? How did you first go about creating it and how easy it has become to manage your finances once you did it? We would like to know your opinion.