Tips for Couples Managing Joint Accounts
Steps to take to ensure a strong financial relationship together
As an individual, you have probably established your own personal ways of managing your finances. When it comes to combining your finances with a significant other—whether you’re getting married, moving in together or otherwise—there are certain things to consider to make sure that your finances are managed as smoothly as possible.
Casey Slide of MoneyCrashers.com noted that you shouldn’t expect to become an immediate expert on how to incorporate your loved one’s finances with your own. When not approached correctly, poorly managed finances can turn even the best relationship into a tragedy. Slide offered the following helpful tips to consider as you strive to develop healthy financial habits together.
Talk about finances early. Before you move in together or wed, discuss your current individual financial situation—what accounts you have, how much debt you have and how you want to handle your money together.
Discuss options for financial accounts. Should you open a joint account or keep your finances separate? According to Slide, “Combining accounts can simplify your finances and may help breed trust in a marriage. Moreover, it may be especially valuable when one spouse chooses to take on more household or child-rearing duties than the other and as a result there is inequality in income.”
Create a fund for emergencies. Set aside money specifically for when the unexpected happens—an accident, losing a job, a family illness, major repairs in the home, etc. It’s advised to save approximately six months’ worth of your household expenses for emergency needs.
Build a budget. Sit down and figure out all of the expenses you both share each month, determine what your budget should be, and stick to it. If you enjoy going out and doing other leisure activities, be sure to set aside money for this as well.
Additional tips that will help keep your relationship strong and your finances out of the red include:
- Sharing responsibilities
- Working as a team
- Being honest and trusting one another
- Learning from each other’s financial strengths
There are many benefits to opening a joint checking account with your significant other, including the confidence in knowing that you are both on the same financial team. However, Barbara Marquand from the website MoneyRates.com said that “little mistakes can add up to big blunders in a joint account, which can hurt your bottom line as well as your relationship.”
Even the most financially organized households can experience mistakes. Here are some tips to help reduce the number of mistakes you encounter as you begin to manage your joint account together.
Keep only one master checking account register. Both of you should use the same document to track all of your deposits and transactions. Review the account regularly to ensure the balance is accurate and you are both aware of your financial status.
Sign up for online banking to monitor your account. Frequently keeping an eye on your account will reduce mistakes such as unrecorded withdrawals or purchases.
Talk about large purchases prior to making them. Agree to discuss a purchase prior to making it if it exceeds a certain amount. You don’t want to catch your significant other off guard with a large purchase that might put your account in jeopardy.
By setting guidelines early, communicating often and regularly monitoring your joint account, you will effectively reduce the number of financial mishaps that occur, resulting in a less stressful relationship.