Four questions to answer before opening a joint bank account if you’re not married – but need to get permission

A JOINT bank account can make it easier to manage your finances as a couple.

However, there are a few things to consider before opening a joint bank account with a partner you are not married to.

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If you have similar spending habits as your partner and have been together for a while, creating a joint bank account could be a smart financial move.

This can make financial decision-making easier and even improve relationship satisfaction for couples for at least a year, according to studies.

Couples can open a joint checking or savings account whether they are married or not.

However, both parties must obtain approval from the bank to open an account.

Joint accounts work in a similar way to normal bank accounts, with the main difference being that they have two holders, each with full access to all the account’s features.

Each owner can check their account balance, make purchases and deposits, receive a debit card, and transfer funds to an external account.

Each person legally owns half of the money in the joint account.

FOUR CONSIDERATIONS

Sarah Brady from Yahoo Finance shared four things couples should consider before opening a joint account.

1. Are you both financially reliable?

First, the couple should consider whether each party is financially reliable and whether they have similar spending habits.

It’s also a good idea to review your credit reports and financial statements as a couple to determine if you’re ready to take on your partner’s financial challenges.

two. What if you break up?

Brady noted that it’s important for couples to plan ahead in case they separate.

Couples should discuss how the account funds and remaining expenses would be divided before closing the joint account.

3. How will you divide your budget?

A third thing to consider is how shared expenses would be divided.

Couples must assign responsibility for managing each household account.

Alternatives to joint accounts

There are several alternatives for couples who are not yet ready to pool their money in a joint account.

Linked accounts:

With linked accounts, each party can maintain their own account but link the two.

Your significant other will not have access to your funds, but will be able to see your account activity.

Having linked accounts also makes it easier to transfer funds between the two, as they are from the same bank.

Hybrid Approach:

A hybrid approach involves having separate accounts as well as a joint account to use for shared expenses.

Shared Money Management Apps:

This option involves using a budgeting app made for couples, like Honeydue.

These apps allow you to link bank accounts and split expenses, but each party can determine what information can be viewed by their partner.

They should also discuss their expectations regarding how much each person will deposit into the account and clarify which personal expenses should or should not be covered by the joint account.

4. When will you review your finances?

Brady advised couples considering a joint account to schedule time to review their finances every month, as having these discussions scheduled regularly can improve your financial well-being.

Doing so can help prevent financial mistakes and track progress toward shared goals.

PROS AND CONS

Brady also shared several pros and cons of opening a joint bank account.

Having a joint bank account makes it convenient to split household bills and save for mutual expenses and goals.

It also holds you accountable for your financial habits and can increase your sense of partnership and chances of staying as a couple.

However, a joint bank account can result in financial dependence on one partner and less financial privacy.

Additionally, your partner may make purchases that you do not consent to, or in rare cases, may revoke your account owner status without your knowledge.

In related news, Visa has confirmed changes to 304 million debit and credit cards in the US – and it means your wallet will be “thinner”.

Plus, everything you need to know about starting a career in banking.